Investors in India’s bustling metal market woke up to red screens today, as shares plunged up to 6.35 percent on the back of crashing silver and copper prices. The sector’s star performers from recent weeks suddenly looked vulnerable, prompting a widespread reassessment of valuations.
At the epicenter was Hindalco Industries, whose stock dived 6.35 percent amid a perfect storm of headwinds. Copper, vital for its operations, slipped below $9,500/tonne globally, while silver futures eroded 3 percent from overnight highs.
Digging deeper, the decline traces back to softening global demand. China’s manufacturing PMI disappointed at 49.5, signaling contraction and hammering copper sentiment. Simultaneously, a stronger US dollar weighed on dollar-denominated metals.
‘Silver’s dual role as industrial and precious metal makes it particularly sensitive right now,’ explained a market strategist. With electronics demand faltering and no imminent rate cuts, upside catalysts evaporated.
Technical charts painted a bearish picture too. The Nifty Metal index broke key support at 9,200, opening doors to further downside toward 8,800. Volume surged 2.5 times average, confirming institutional selling.
Sector peers followed suit: Vedanta -5.8%, Hindustan Copper -5.5%, Nalco -5.2%. Steel giants escaped lightly but still posted 3-4 percent losses, dragged by input cost optimism fading.
Macro overlays added complexity. Expectations of prolonged high interest rates globally crimp industrial activity, directly hitting metal consumption in construction, autos, and power.
Positive note? Declines brought valuations back to attractive multiples. Hindalco trades at 8x forward earnings, versus 12x peaks earlier this year.
Analysts advise a measured approach. ‘Rotate into defensive sectors like FMCG or pharma,’ recommends one report. ‘Metals need sustained China recovery for sustained rebound.’
By session end, losses moderated slightly on short-covering. Yet the message is clear: in commodity cycles, sharp corrections test even the strongest convictions.