Metal Stocks Rally Strong; Hindustan Copper, Vedanta and SAIL Lead 2% Surge in Nifty Metal Index – Key Factors Behind the Rise

Mumbai | November 26

The Nifty Metal index surged nearly 2% on Wednesday, extending gains for a second consecutive session as metal companies advanced across the board. The sector benefited from strong global cues, renewed expectations of a US Federal Reserve rate cut, and improving domestic sentiment following supportive commentary from the Steel Ministry.

The index climbed to an intraday high of 10,260.45, placing it within 5% of its all-time peak of 10,837.45 hit in October last year. All constituents opened higher, making Nifty Metal one of the best-performing sectoral indices in early trade.

Top Movers: Hindustan Copper, Vedanta, SAIL and JSW Steel Lift the Index

SAIL jumped 4.5%, emerging as the strongest performer, while Hindustan Copper gained nearly 3%, tracking firm global copper prices. Vedanta advanced more than 1.9%, supported by buying interest in non-ferrous names.

JSW Steel rose 3.4%, and other key constituents Tata Steel, NMDC, JSPL, APL Apollo, NALCO, Hindustan Zinc and Hindalco delivered gains of over 1% each, pointing to broad-based strength rather than selective buying.

Turnover remained strong, with high participation across both ferrous and non-ferrous counters, signalling renewed institutional interest after a weak November for the sector.

Despite today’s rally, the Nifty Metal index had fallen 3.4% in November, its steepest monthly decline in seven months. The drop was triggered by the government’s decision to extend exemptions on mandatory steel quality control norms, which raised concerns of higher steel imports, particularly from China.

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However, the longer-term trend remains firmly positive. The index is up 15% over the past year, 10% in six months, and has returned 250% over five years, making it one of the strongest performers in India’s equity market.

What’s Driving the Surge: Policy Signals and Global Tailwinds

Two key drivers underpinned Wednesday’s rally:

1. Expectations of a Fed Rate Cut Have Strengthened

Global metals rose after investors increased bets on a potential Federal Reserve interest rate cut in December. A softer dollar typically boosts metals by making them more affordable for international buyers.

2. Fresh Commentary From the Steel Ministry Boosted Domestic Sentiment

The Steel Secretary indicated that the government is evaluating the reinstatement of an import safeguard duty on certain steel products. The provisional duty expired on 6 November, and the market has been awaiting clarity since.
Earlier recommendations suggested an 11–12% tariff, aimed at countering cheaper imports, mainly from China and supporting domestic producers.

The Secretary added that revisions to BIS norms and quality controls are intended to “balance the interests of steelmakers and consumers”, reinforcing expectations of regulatory support for the sector.

Non-ferrous metals also gained, with Hindustan Copper, Hindustan Zinc and Vedanta advancing on higher global copper and zinc prices and firm demand expectations.

Outlook: Metal Stocks Poised for Further Upside if Policy Turns Supportive

The near-term direction of the Nifty Metal index will depend largely on the government’s decision on safeguard duties and the strength of domestic steel demand. With the index already up 19% year-to-date, well ahead of the Nifty50’s gains, a supportive policy backdrop could bring it closer to retesting its October 2024 highs.

For now, a combination of broad-based buying, firm global cues and clearer signals from the Steel Ministry has contributed to one of the strongest trading sessions for metal stocks in recent weeks