Prime Highlight
- Metal shares rallied, with the Nifty Metal index climbing 2% intraday, outperforming the broader market.
- Gains were led by Vedanta, Hindustan Zinc, Hindustan Copper, and Tata Steel, fueled by rising gold and silver prices.
Key Facts
- Vedanta surged to an all-time high of ₹679.45, rising 11% in three sessions and 51% over four months, while Hindustan Zinc hit ₹669.75, a multi-year high.
- Analysts expect higher profitability for metals companies in FY26due to strong commodity prices, lower production costs, and improving steel demand.
Background
Shares of metal companies continued their upward move on Wednesday, with both ferrous and non-ferrous stocks seeing strong buying interest. The Nifty Metal index climbed as much as 2% in intraday trade on the NSE, even as the benchmark Nifty 50 slipped by 0.23%.
At around 10:21 am, the metal index was the best-performing sector and traded close to its record high. The rally was led by Vedanta, which surged 6% to hit a fresh all-time high of ₹679.45. Hindustan Zinc also rose 6% to a multi-year high of ₹669.75. Hindustan Copper gained 5%, while Tata Steel advanced nearly 4%. Shares of National Aluminium (Nalco), Jindal Steel, and SAIL rose between 2% and 3%.
Metal stocks gained support from a sharp rise in gold and silver prices. Softer US inflation data strengthened hopes of interest rate cuts by the US Federal Reserve, boosting demand for commodities. Ongoing geopolitical tensions and economic uncertainty further supported buying interest in metals, market experts said.
Strong demand fundamentals also added to the rally. Central banks continued to buy gold, and demand for silver rose as more industries used it in solar power, electric vehicles, AI systems and electronics. At the same time, supply constraints helped keep prices firm.
Vedanta has gained 11% in the past three sessions and has jumped 51% over the last four months. Analysts expect higher profitability for the company in FY26, supported by strong prices of zinc, aluminium, and silver, along with lower production costs.
Brokerages remain positive on the metals sector. Higher commodity prices, a weaker rupee, and improving steel demand are expected to support earnings in Q3FY26. Analysts also expect better margins for steel companies in the coming quarters as demand improves.