NMDC shares slump 5% on iron ore price tumble. Should you buy, sell or hold?

According to stock market experts, this slump in NMDC shares is mainly due to iron ore price tumble. They said that it’s a commodity stock and may further go down towards ₹120 to ₹35 levels. However, they maintained that this will be good buying zone for accumulators and fresh buyers as iron ore prices are expected to bounce back in near term.

Highlighting upon the reason for NMDC share price slide; Ravi Singhal, Vice Chairman at GCL Securities said, “NMDC is a commodity stock and it consumes good amount of iron ore as raw material. But, recently iron ore futures prices have tumbled heavily and this is the major reason for NMDC share price slide. Iron ore prices are expected to remain under pressure for few more sessions and hence NMDC shares may further go down from current ₹145 odd levels. However, there will be sharp upside rebound in the scrip once the iron ore price starts regaining its lost ground.”

Echoing with Ravi Singhal’s views; Anuj Gupta, Vice President at IIFL Securities said, ” ₹125 to ₹135 will be a good buying zone for NMDC shares. So, those who hold NMDC shares are advised to accumulate in this zone whereas fresh buyers are advised to buy in this zone maintaining stop loss at ₹119 apiece levels. IT may soon bounce back up to ₹175 levels. However, after buying in ₹125 to ₹135 zone, one can hold the counter for medium term target of ₹210 as well.”

Extending its sharp losses incurred on Monday, iron ore future price today tumbled around 10 per cent as traders charged out of the commodity amid fears of a China clampdown as Beijing warned it would act against what it called the spread of misinformation on prices. The most-traded iron ore for May delivery on China’s Dalian Commodity Exchange tumbled as much as 9.7 per cent to 701 yuan ($110.35) a tonne, weakest since January 18.

Iron ore futures prices for March contract on the Singapore Exchange slumped by as much as 11.4 per cent to $131.55 a tonne.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.