Metal companies in India headed for the lowest close in more than two years after major producers reported weak quarterly earnings amid growing worries about a slowdown in demand in Asia’s third-biggest economy.

The S&P BSE Metal Index, moving toward the lowest close since December 2016, was among the worst performers on the Bombay Stock Exchange after JSW Steel Ltd and Vedanta Ltd plunged on Monday. These shares slumped by more than 5 per cent after both companies reported a sharp drop in profits on Friday.

India has been struggling to revive consumer demand in everything from cars to bank loans and the economy remained sluggish in June, with the slowdown becoming more pervasive amid a slump in services and a plunge in exports, according to a cross section of eight high-frequency indicators compiled by Bloomberg News . Vedanta posted a 12 per cent decline in quarterly profit, while JSW Steels profit more than halved on lower prices and as sales declined on weaker domestic demand and lack of credit availability.

“The slowdown in consumption and in the automobile sector amid issues such as elevated debt are keeping a temporary lid on metal stocks,” AK Prabhakar, head of research at IDBI Capital Market Services Ltd, said by phone from Mumbai. JSW and Vedanta’s earnings are further weighing down the stocks, he said.

Vedanta pared some losses to trade 4.5 per cent lower at Rs 156.50 as of 12:50 PM in Mumbai, while JSW was down 3.4 per cent. The benchmark S&P BSE Sensex fell 0.7 per cent.

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