Metal Stocks Slide up to 6% Amid Stronger Dollar, Gaza Truce, and Profit Booking

Indian metal stocks came under pressure on October 10, reversing the previous session’s gains and emerging as the only laggard among major sectors. The Nifty Metal index slipped and closed around 1% to 10,261.55 points, as heavy selling weighed on several prominent counters. The decline came amid global cues such as a stronger U.S. dollar, falling silver prices, geopolitical developments in Gaza, and investor profit booking.

Hindustan Copper Leads Losses in Metal Index

Hindustan Copper share price emerged as the top loser in the metal pack, dropping nearly 6% to ₹344.55 per share. Hindustan Zinc followed with a 2.72% fall, trading at ₹498.30 per share. Steel Authority of India Limited (SAIL) and National Aluminium Company (NALCO) each declined over 3%, while NMDC, Jindal Steel & Power, and Tata Steel lost around 2% each.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

Other major players like Vedanta, Hindalco Industries, and JSW Steel stock price also saw mild losses of around 1%, while Welspun Corp slipped marginally. In contrast, Adani Enterprises, APL Apollo Tubes, and Jindal Stainless traded in positive territory, bucking the broader sectoral weakness.

Stronger Dollar and Weaker Rupee Pressure Commodities

The sharp sell-off in metal stocks was partly attributed to the strengthening U.S. dollar and a weakening rupee. The Indian rupee was trading at 88.70 against the U.S. dollar around 12:30 pm, hovering close to its record low of 88.80 hit last week.

A stronger dollar makes globally traded commodities like copper, aluminium, zinc, gold, and silver more expensive for buyers using other currencies. This typically dampens demand, leading to weaker prices and affecting metal producers.

Silver Prices Correct After Record Rally

Silver futures on the Multi-Commodity Exchange (MCX) also lost ground after their recent surge. December-expiry contracts fell by ₹276 to ₹1,46,600 per kilogram, while longer-term contracts for March and May slipped around 0.5%. July futures dropped 1.5%, and September contracts tumbled nearly 3%.

This correction followed a record high of ₹1,53,388 per kg earlier this month. The decline in silver prices weighed particularly on Hindustan Zinc, India’s largest silver producer, dragging its share price further.

Gaza Truce and Profit Booking Add to Pressure

Geopolitical factors also influenced market sentiment. Reports suggested that Israel and Hamas had agreed to the first phase of a ceasefire and hostage deal under a U.S.-backed truce plan. A potential de-escalation in the Middle East could reduce demand for safe-haven assets like precious metals, prompting investors to shift towards risk-based assets.

Additionally, analysts cited profit booking as another reason behind the day’s losses. The Nifty Metal index had gained more than 2% on October 9, breaking a three-session losing streak. Traders likely booked profits following that short-term rally.

Conclusion

Metal stocks faced broad-based declines on October 10, driven by global currency movements, softening commodity prices, easing geopolitical tensions, and near-term profit booking. Despite the temporary setback, analysts expect underlying demand for metals to remain steady, supported by infrastructure growth and industrial activity in the coming quarters.