After seven straight days of gains, metal stocks in India fell on December 29, with big names like Hindustan Zinc and NMDC dropping up to 3%.
Why the sharp drop?
The slide was triggered by a sudden fall in metal prices – gold, silver and copper all slipped after a recent rally. Analysts point to easing geopolitical tensions and new export restrictions from China as key reasons.
What had lifted metal stocks earlier?
Before the dip, metal stocks had been rising on a mix of favorable factors:
- Fed rate‑cut hopes: Expectations that the U.S. Federal Reserve may lower rates in 2026 boosted commodity sentiment.
- China’s policy support: Government spending on infrastructure, power grids and renewable projects lifted demand for steel, copper, aluminium and zinc.
- Tight supply: Limited inventories of base and precious metals kept prices buoyant, while demand from electric vehicles, renewable energy and AI remained strong.
- Softer U.S. dollar: A weaker dollar made dollar‑priced metals more attractive.
Top losers and rare gainers
Among the biggest losers were:
- Hindustan Zinc – down about 3% to ₹618.15
- NMDC and National Aluminium (NALCO) – each off roughly 2%
- Vedanta, Adani Enterprises, Hindalco, JSW Steel and APL Apollo Tubes – each slipped over 1%
Hindustan Copper bucked the trend, ending nearly 3% higher after an intraday surge of around 15% that sent it to a fresh 52‑week high.
Welspun Corp and Tata Steel each rose about 2%, while Jindal Steel & Power and Jindal Stainless posted modest gains.
What lies ahead?
Analysts say the momentum in metal stocks could continue, but volatility is likely. Global steel demand is expected to grow only modestly through 2030, yet demand outside China and infrastructure spending in emerging markets should keep volumes on an up‑trend. In India, government capex and housing demand remain supportive.
However, metals remain sensitive to shifts in global demand, currency moves and interest‑rate expectations. A soft dollar and a dovish Fed stance help, but any surprise U.S. economic data or new concerns about China’s exports could trigger sharp corrections.
For investors, focus on companies with strong balance sheets and low‑cost production rather than chasing every price spike.
Disclaimer
Remember, this is just my perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.