Market talks that LME metal prices may see a big price correction at any time soon caused sell-off in metal shares.

The overall market declined sharply by afternoon trade, tracking weakness in markets across the globe. The Sensex was down 261 points at 12,024. Asian share markets fell sharply on Monday (15 May), hurt by a two-day slide in US stocks on inflation fears and as a sinking dollar prompted investors to sell exporters. Key indices in Hong Kong, Japan, Australia, South Korea, Singapore and Taiwan were down between 0.69-2.6%. US stocks fell sharply on Friday, extending a two-day slide as a jump in import prices fanned inflation fears and weaker crude oil prices hurt energy stocks.

Domestic metal scrips had spurted over the past few months as metal firms raised prices, tracking soaring LME metal prices. From Rs 157.90 on 22 March, Hindalco had jumped 53.5% to Rs 242.50 on 12 May. Hindustan Zinc had spiraled up 182% to Rs 1,030.70 on 12 May from Rs 365.15

Copper fell $140 to close at $8,460 on Friday, a day after the red metal soared 9% to a record $8,800. Prices for copper have doubled this year due to strong demand, especially from China and India, concern over supply disruptions and relentless fund buying. However, present record-high copper prices would not last, even though current world demand was outstripping limited supplies, the head of Chilean government-owned Codelco, the world's largest copper miner, said on Friday.

Last Thursday, talk swirled through the London metal market that the price spike was forced covering, possibly because a broker was experiencing severe financial difficulties related to meeting margin calls.