Vedanta, Hindustan Zinc, NALCO and other metal stocks down by up to 6%; Here’s why

SYNOPSIS: Nifty Metal stocks fell sharply as profit booking, weaker global metal prices, a firmer US dollar, and caution ahead of key US data triggered selling after a strong commodity-led rally.

Metal stocks came under intense selling pressure on Thursday, with the sector witnessing a sharp decline amid broader market weakness. On 8th January, shares of metal and mining companies traded decisively lower, marking the steepest intraday drop since April 2025 and ending a two-week upward run. 

The NIFTY Metal index slid as much as 3.6 percent, touching a one-week low of 11,107.15, compared with its previous close of 11,524. All 15 stocks in the index were trading in negative territory during the session.

Hindustan Zinc led the losses, tumbling nearly 6.5 percent to around Rs. 588.55 on BSE, its weakest level since 19th December. The stock declined as silver prices fell sharply, dropping by as much as Rs. 4,000 per kilogram within an hour, with silver-linked ETFs also trading lower.

Global Base Metal Weakness and Falling Silver Prices Weigh on Stocks

The fall in metal stocks mirrored a broader pullback in international base metal prices. The sell-off was led by non-ferrous metal stocks, which had earlier been among the biggest gainers during the recent commodity rally. After a strong run-up, these stocks bore the brunt of profit-taking as sentiment turned cautious.

Shares of National Aluminium Company Limited (NALCO) declined 5.88 percent to Rs. 331.75, while Hindustan Copper slipped 5.81 percent to Rs. 518.8. Vedanta also traded lower, shedding 4.37 percent to Rs. 595 during the session.

Weakness in metal stocks mirrored the decline in commodity prices across exchanges. On the Multi Commodity Exchange of India (MCX), silver, copper, and gold futures moved lower. Silver futures (due for a March 5 expiry) were trading nearly 1 percent down at Rs. 2,48,252, while Copper futures on MCX eased 0.56 percent to Rs. 1,300.45, while spot copper in international markets was marginally higher at $586.9.

The pressure was also visible overseas, where prices softened on the London Metal Exchange (LME). Futures for copper, nickel, and zinc fell more than 2 percent, trimming gains built over the past few weeks following heavy investment inflows into China’s domestic metals markets. Nickel settled 3.4 percent lower at $17,895 per tonne, while copper closed 2.6 percent lower at $12,899.5. Aluminium declined 1.29 percent, and lead slipped up to 0.79 percent by the close.

The correction was largely driven by profit booking after a sharp rally that pushed metal prices to record levels earlier in the week, according to analysts at Kotak Securities. They also pointed to a firmer US dollar and investor caution ahead of key US economic data releases, which could influence the Federal Reserve’s policy outlook, as additional factors weighing on the sector.

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