Though market started on a strong footing despite mixed cues from Asian markets, metal stocks were under tremendous pressure on Monday. Top metal stocks crumbled as JSW Steel, Tata Steel touched lower circuits, while Hindalco dropped more than 5% as Nifty Metal corrected more than 7% in the early trade on Monday. Besides, Steel Authority of India (SAIL) also tanked over 10 % trade on its 52-week low.  

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Metal stocks were already under pressure amid geopolitical tensions as Nifty Metal has corrected nearly 18% in the past one month as on May 23.    

This comes after the government-imposed export duties on steel products. 

The government on Saturday waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry, a move which will lower the cost for the domestic industry and reduce the prices. 

"Most of the exports of steel/stainless steel will attract 15% export duty now (from nil earlier). We see this as an extremely negative development for the steel sector and expect broad-based multiple de-rating," brokerage house ICICI Securities said after the government move.   

The move will send a negative signal to investors and adversely impact capacity expansion projects under PLI scheme, steel industry players told news agency PTI said after the government removed customs duties on raw materials and hiked export taxes to check local prices. 

Meanwhile, around 10.15 am, shares of JSW Steel were trading lower by nearly 11% to Rs 562 per share, Tata Steel dropped more than 12% to Rs1029.70 apiece and SAIL traded on Rs 74.75 a share on the BSE.  

Several brokerage houses have also downgraded the sector post government's move.  

ICICI Securities downgraded Tata Steel, JSPL, JSW Steel and SAIL to REDUCE. It was of the view that it was expecting an EBITDA increase cycle to play out over the next 3-4 quarters in steel, but the same has been interrupted