Metal Stocks Slide As Selling Pressure Builds; Index Down Nearly 3% On Profit Booking And Weak Global Cues

Metal stocks emerged among the top losers on Thursday as investors booked profits following a short-term rally and global commodity cues turned weak. The Nifty Metal index declined nearly 3% to around 11,726 in early trade, ending a three-day gaining streak during which the index had advanced more than 6%.

Key Stocks Under Pressure

• Hindustan Zinc dropped about 7% to around ₹593, slipping below the ₹600 mark.
• Vedanta fell nearly 5%.
• National Aluminium Company (NALCO) declined around 4%.
• Hindustan Copper and Hindalco Industries were down close to 3% each.
• NMDC and Lloyds Metals and Energy also traded lower.

Broader names such as Tata Steel, Steel Authority of India (SAIL), and JSW Steel saw mild losses.

Three Reasons Behind The Fall

1. Profit Booking After Recent Rally: The sector had seen strong gains over the past few sessions. The Nifty Metal index rose more than 6% in three days and several stocks approached short-term highs. Such sharp moves often trigger selling at higher levels, especially from traders locking in near-term gains. This led to broad-based profit booking across ferrous and non-ferrous counters.
2. Stronger U.S. Dollar Weighs On Commodities: The U.S. dollar strengthened ahead of global central bank policy decisions. A firm dollar typically pressures commodity prices because metals are priced in dollars. Higher dollar strength makes these commodities costlier for international buyers, which can dampen demand. Lower demand expectations tend to translate into weaker price realisations for producers, impacting metal stocks.
3. Fall In Gold And Silver Prices: Precious metal prices also corrected sharply. Gold futures declined around 3%, while silver futures dropped nearly 6% in early trade. Companies with exposure to zinc, silver and related by-products, including Hindustan Zinc, are directly influenced by movements in bullion prices. Falling commodity prices generally affect revenue visibility and sentiment in the sector.

Commodity Market View

The decline reflects short-term pressure rather than structural weakness. Traders are reacting to global cues and near-term price movements in commodities. Going ahead, direction in global metal prices, currency trends and overall market sentiment are likely to guide movement in metal stocks. For now, the sector remains volatile after the recent rally, with investors closely tracking international demand signals and commodity price trends.