Metal Stocks Soar on Hopes of US Rate Cut, Silver Hits New Highs

Metal Stocks See a Boost as US Rate Cut Hopes Rise

Metal company shares saw a significant rise in trade on December 10, driven by increasing expectations of a US Federal Reserve rate cut after their FOMC meeting. A rate cut in the US could lead to reduced borrowing costs for foreign investors, making higher growth markets in India more attractive and boosting metal stocks.

Nifty Metal Index Sees Gains

The Nifty Metal index rose to 10,198.35, snapping a two-day losing streak and becoming the top gaining sectoral index on the market today. This surge is largely due to the anticipated rate cut, with traders now pricing in an approximately 89 percent chance of a 25-basis-point rate cut.

Notable statements from Fed officials, including Fed Governor Christopher Waller and New York Fed President John Williams, have supported the notion of a potential rate cut, citing a weak US job market and the need for monetary policy adjustments.

Silver Reaches New Heights

Silver futures saw significant gains, with March expiry rising around 1.5 percent to hit a fresh lifetime high of Rs 1,90,799 per kilogram. Spot silver prices also crossed $60 for the first time, hovering near $61 an ounce, marking a 32 percent jump in the last 24 hours.

Aksha Kamboj, Vice President of India Bullion & Jewellers Association (IBJA), noted that industrial utilization of silver, global supply constraints, and investment demand are driving the silver price rally. Silver has outperformed gold, with many investors opting for silver.

Market Experts Weigh In

Naren Agarwal, CEO of Wealth1, advised investors to focus on balance sheets, capacity utilization, and long-term demand visibility in steel, aluminium, and base-metals supply cycles, rather than chasing quick rebounds.

Aman Gupta, Director of RPS Group, suggested that Indian metal companies are benefiting from solid global base-metal prices and supply constraints in foreign countries, making it a potential opportunity for investors to reconsider cyclical sectors.

Shravan Shetty, Managing Director at Primus Partners, pointed out that metal stocks have gained over the last year, with niche metal stocks outperforming large players, and that the rupee devaluation and tariffs have impacted margins.

Top Gainers and Losers

Hindustan Zinc shares were the top gainers on the index, rising around 5 percent. Vedanta, Jindal Stainless Steel, and Hindalco Industries shares gained nearly 2 percent each. Tata Steel, Jindal Steel & Power, and Hindustan Copper shares gained around 1 percent each.

In contrast, JSW Steel, Steel Authority of India (SAIL), and National Aluminium Company (NALCO) shares were trading in the red with marginal losses.

Keep an eye on the stock markets for live updates and the latest developments in the metal sector.