Metal Stocks Extend Winning Streak as Global Prices Soar, Investors Eye Sustainability of Rally
Metal stocks continued their strong upward march for the eighth consecutive session on December 29, buoyed by a sharp rally in global commodity prices and improving sentiment across both ferrous and non-ferrous segments. Heavyweights such as Hindustan Copper, SAIL, Tata Steel and Vedanta surged sharply, with select stocks jumping as much as 15 percent in early trade.
The sustained buying pushed the Nifty Metal index up about 1.5 percent to 10,967.75 by mid-morning, after the index touched a fresh 52-week high of 10,983.20 earlier in the session. With gains of nearly 5 percent over the past eight trading sessions, the metal index has emerged as one of the strongest performers in the broader market, even as other sectors struggled with volatility and profit booking.
Market participants say the rally reflects a confluence of supportive global and domestic factors rather than a single trigger, prompting investors to reassess their exposure to cyclical commodities.
Global Macro Tailwinds Drive Broad-Based Buying in Metals
Analysts attribute the sharp move in metal stocks to a favourable global macro environment. Harshal Dasani, Business Head at INVasset PMS, said the rally has been underpinned by broad-based buying across ferrous and non-ferrous names.
“Recent sessions saw Nifty Metal and key names like Hindustan Copper, Hindalco, Vedanta and SAIL push to fresh highs, aided by improving global cues and a pickup in turnover that signals institutional interest returning after a weak November,” Dasani said.
He added that sentiment has turned decisively positive as investors rotate into commodities amid expectations of easier monetary conditions globally and improving demand visibility in key consuming regions.
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Fed Rate-Cut Hopes and China Demand Lift Metal Prices
One of the key drivers behind the surge has been renewed optimism around interest rate cuts by the US Federal Reserve in 2026. According to Aditya Welekar, Senior Research Analyst – Metals at Axis Securities, easing labour market conditions in the US are giving the Fed room to lower rates, which typically supports metal prices.
“The prospect of lower interest rates improves liquidity conditions and boosts demand for metals, particularly those linked to infrastructure, manufacturing and energy transition,” Welekar said.
China has also played a crucial role in lifting sentiment. Incremental policy support for infrastructure, power grids, renewable energy projects and urban redevelopment has improved demand visibility for steel, copper, aluminium and zinc. While China’s property sector remains under pressure, analysts note that state-led capital expenditure and industrial activity have stabilised, helping global metal prices find a floor.
Tight Supply and Energy Transition Themes Add Structural Support
Beyond demand-side drivers, supply constraints have amplified the rally. Dasani noted that inventories across several base metals remain tight, limiting downside risk even amid uneven global growth. Welekar echoed this view, highlighting that supply constraints in copper and aluminium are coinciding with rising demand from electric vehicles, renewable energy and artificial intelligence-related infrastructure.
Another major tailwind has been the softer US dollar. With markets pricing in a gradual easing cycle, the dollar index has eased from recent highs, supporting dollar-denominated commodities. Lower real yields have further improved the relative attractiveness of metals as an asset class.
On the supply side, mining disruptions, higher energy costs and stricter environmental norms have constrained capacity additions, particularly in refined metals, just as demand from electrification and power transmission themes continues to grow steadily.
Commodity Rally Reflects Structural Deficits, Not Just Speculation
The rally across metals is being reinforced by underlying physical market dynamics, said Charmi Shah, Business Head at Wealth1. “The current rally in gold, silver and copper reflects a tightening physical supply environment rather than just paper-market enthusiasm,” she said.
Shah pointed out that both silver and copper have been running structural deficits for years. Demand from solar, electronics and EV supply chains has consistently outpaced mine supply, while inventories remain thin across major exchanges. In copper, years of underinvestment, long gestation periods for new mines and declining ore grades are now translating into higher prices.
She added that gold’s strength is being reinforced by aggressive central bank accumulation, particularly by emerging markets seeking diversification away from fiat currencies. China’s buying interest across gold, silver and industrial metals has further amplified the rally at a time when global supply chains remain fragile.
Top Metal Gainers Reflect Strong Momentum Across the Board
The rally was led by Hindustan Copper, which jumped around 7 percent to trade near ₹508, after touching an intraday high of nearly ₹546. The stock’s surge followed copper prices hitting record highs, with three-month copper on the London Metal Exchange climbing to around $12,960 a tonne.
SAIL shares rose over 4 percent, while Tata Steel, Vedanta and Jindal Steel & Power gained more than 2 percent each. Hindustan Zinc advanced nearly 2 percent, and stocks such as JSW Steel, APL Apollo Tubes, Welspun Corp and Hindalco Industries also posted solid gains. Broader participation was seen as NALCO, NMDC and Adani Enterprises traded with modest advances.
What Lies Ahead for Metal Stocks?
Looking ahead, analysts believe momentum in metal stocks could continue, though bouts of volatility cannot be ruled out. Dasani said that while global steel demand growth is expected to be modest through 2030, ex-China consumption and infrastructure spending in emerging markets should support a gradual uptrend.
In India, government-led capital expenditure, housing demand and energy transition initiatives remain key tailwinds for metal producers. However, Siddharth Maurya, Founder & Managing Director at Vibhavangal Anukulakara, cautioned that metals remain vulnerable to shifts in global demand, currency movements and interest rate expectations.
“The rally can continue, but investors should be prepared for periodic pullbacks as markets digest macro data and reassess global growth drivers,” Maurya said.
For investors, experts suggest focusing on balance-sheet strength, cost-efficient producers and companies with strong exposure to long-term structural themes, rather than chasing sharp short-term spikes. As Dasani summed up, “This is a classic cyclical rally—participation should be selective, disciplined and aligned with fundamentals.”
