Vedanta stock hits near 1-year low

Vedanta shares fell as much as 4.95 per cent to Rs 240.15, their lowest since June 28, 2017.

The downtrend in the stock movement continued as 12 people were killed in the southern Indian state of Tamil Nadu after police fired at violent protesters calling for closure of a copper smelter run by co's London-listed parent Vedanta Resources.

A court had on Wednesday put a temporary halt to the company’s much-delayed plan to nearly double the capacity at the plant. Demonstrations against the copper plant, one of India's biggest, have been going on for more than three months, with protesters alleging that it is a major source of pollution and risk to fisheries.

Shares of parent Vedanta Resources fell 11.5 per cent on Wednesday, despite reporting full-year profit that beat estimates. In the last two months, analysts have trimmed Vedanta's current fiscal year's profit forecasts by 9.2 per cent, the biggest downgrade among metals and mining companies in India.

Vedanta trades at a 12-month forward PE of 7.05, lowest among metals and mining firms in India; the company’s last five years' average PE is 8.57. Technically, the stock trades near a support at Rs 242, the 38.2 per cent Fibonacci retracement level of the uptrend from the February 12, 2016 low to the January 29, 2018 high.

A break below Rs 242 on a closing basis may lead to a fall towards Rs 206.9, the 50 per cent retracement level. The stock's Trend Intensity (TI) indicator at 18 suggests a new downtrend for the stock has started.

The stock's 50-day exponential moving average (EMA) has cut below its 200-day EMA this month, forming a 'death cross' which is seen as a bearish signal. Vedanta shares have fallen 23.4 per cent this year as of Wednesday's close.