Hindalco Shares Rise More Than 6% on March 5 on Higher Aluminium Prices Due to Supply Disruptions in the Middle East

Shares in Hindalco Industries rose by more than 6% on March 5, owing to higher aluminium prices following disruptions in the supply chain in the Middle East region, which has boosted the Nifty Metal Index. The move has caused the Nifty Metal index to rise by more than 3% in early trade.

Earlier today, Hindalco Industries was the top gainer on the Nifty 50, rising 6.1%. Gains in the stock came alongside broader strength in metal companies. The Nifty Metal index advanced 3.1%, making it the best-performing sectoral index during the session, according to National Stock Exchange data.

Benchmark indices also traded in positive territory. The BSE Sensex was up 152 points or 0.2% at 79,268, while the NSE Nifty 50 gained 67 points to 24,547. Market breadth remained positive with 2,184 stocks advancing compared with 1,298 declines, based on exchange data.

Metal Stocks Record Broad-Based Gains

Shares of several metal companies moved higher alongside Hindalco. National Aluminium Company rose more than 7% in early trade. Vedanta shares gained 4.7%, while Hindustan Zinc advanced 2.3%. Tata Steel rose 2.4% and JSW Steel increased about 1.9%, according to National Stock Exchange data.

The gains in metal stocks followed an increase in aluminium prices in global markets. Aluminium contracts on the London Metal Exchange moved higher after supply concerns emerged in the Middle East.

Supply Concerns Affect the Aluminium Market

Supply concerns in the region have contributed to the increase in aluminium prices. There have been reports of a halt in shipments from Bahrain, and Qatar's aluminium producer, Qatalum, has begun a shutdown owing to gas supply constraints.

Supply concerns have also coincided with shipping disruptions via the Strait of Hormuz, an important shipping route for global energy and commodity trade. The Middle East is a major contributor to global aluminium production, and hence supply disruptions in this region are noteworthy.

Global commodity markets have been sensitive to movements in this region, especially owing to heightened geopolitical tensions over the past few days.

Broader Market Movement

Despite the rally in metal stocks, volatility in the broader market remained elevated. The India VIX declined about 9% to 19.24 during the session, according to market data.

Most sectoral indices traded with modest gains, although the Nifty IT index was under pressure and declined more than 1% during early trade.

The rise in metal stocks came after selling pressure in the previous session and followed the increase in aluminium prices linked to supply disruptions in the Middle East. As commodity prices moved higher, shares of companies linked to aluminium production and metal mining recorded gains across the market.