Metal Stocks Extend Winning Streak as Global Cues Power a Broad-Based Rally
Metal stocks continued their strong upward momentum on December 23, rising for the fifth consecutive session, as a supportive global macro environment, firm commodity prices and improving institutional participation lifted sentiment across the sector. The rally has been broad-based, spanning both ferrous and non-ferrous names, and has pushed the Nifty Metal index into positive territory for nine of the last ten sessions.
By mid-morning, the Nifty Metal index was up 0.75 percent at 10,748.95, taking its gains to over 6 percent in the last ten trading sessions. Market participants said the move reflects a combination of global and domestic factors rather than a single trigger, suggesting that metals may be entering a favourable cyclical phase.
NMDC, SAIL and Hindustan Copper Lead the Charge
Buying interest was strongest in public sector metal names, which have outperformed the broader market in recent sessions. NMDC shares surged more than 4 percent to Rs 81.79, emerging as the top gainer on the index. Hindustan Copper and Steel Authority of India (SAIL) climbed over 2 percent each, supported by optimism around base metal prices and domestic infrastructure demand.
Other notable gainers included:
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Welspun Corp and Lloyds Metals & Energy, up around 2 percent
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Jindal Steel and Hindustan Zinc, rising over 1 percent
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NALCO and Tata Steel, gaining about 1 percent
Meanwhile, stocks such as Vedanta, Hindalco Industries, APL Apollo Tubes, Jindal Stainless, JSW Steel and Adani Enterprises also traded in the green, albeit with modest gains.
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Why Metal Stocks Are Rising: Multiple Tailwinds at Play
Analysts point out that the rally in metal stocks is being driven by a confluence of supportive factors rather than short-term speculation.
“Recent sessions saw Nifty Metal and key names like Hindustan Copper, Hindalco, Vedanta and SAIL push to fresh highs, aided by broad-based buying across ferrous and non-ferrous counters,” said Harshal Dasani, Business Head at INVasset PMS. “Turnover has picked up, signalling institutional interest returning after a weak November.”
Key drivers behind the rally include:
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Expectations of US Federal Reserve rate cuts in 2026
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Incremental policy support from China
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Tight global supply across several base metals
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A softer US dollar, boosting dollar-denominated commodities
Fed Rate-Cut Hopes Lift Metal Prices
One of the most important tailwinds for metals has been growing optimism around a more accommodative monetary stance in the US. According to Aditya Welekar, Senior Research Analyst – Metals at Axis Securities, easing labour market conditions in the US have given the Federal Reserve room to cut interest rates next year.
“The easing labor market in the US provides the Fed with the opportunity to lower rates, which bodes well for the metals market,” Welekar said. Lower interest rates typically support industrial metals by improving global growth prospects and reducing financing costs.
China’s Policy Support Improves Demand Visibility
China, the world’s largest consumer of metals, has also played a crucial role in reviving sentiment. Incremental policy measures aimed at infrastructure, power grids, renewable energy and urban redevelopment have helped stabilise demand for steel, copper, aluminium and zinc.
“While the property sector remains weak, state-led capex and industrial activity have stabilised, helping metal prices find a floor,” Dasani noted. Analysts believe that even modest improvements in Chinese demand can have an outsized impact on global metal prices.
Tight Supply and Energy Transition Themes Add Support
Supply-side constraints have further limited downside risks. Tight inventories across several base metals, coupled with underinvestment in new mining capacity, are beginning to reflect in prices.
“The supply side for both precious and base metals like copper and aluminium is constrained, while demand remains strong,” said Welekar. He added that demand from electric vehicles, renewable energy projects and artificial intelligence-driven infrastructure continues to provide structural support.
Echoing this view, Charmi Shah, Business Head at Wealth1, said the rally in commodities is rooted in physical market tightness rather than speculative excess.
“Silver and copper have been running structural deficits for years. Demand from solar, electronics and EV supply chains has consistently outpaced mine supply,” she said.
Softer Dollar and Central Bank Buying Strengthen the Trend
Another important factor has been the softening of the US dollar, which has enhanced the appeal of dollar-denominated commodities. Lower real yields have also increased investor allocation to metals as a hedge against macro uncertainty.
Gold’s strength, in particular, has been reinforced by aggressive central bank buying, especially from emerging markets. “Countries are seeking diversification away from fiat currencies and sovereign debt,” Shah said, adding that China’s buying interest across gold, silver and industrial metals has amplified the rally.
What Lies Ahead for Metal Stocks?
Looking ahead, analysts believe the momentum in metal stocks could continue, though volatility remains a risk. Global steel demand growth is expected to be modest through 2030, but ex-China consumption and infrastructure spending in emerging markets, including India, should support a gradual uptrend.
In India, government-led capital expenditure, housing demand and energy transition projects remain key tailwinds for metal producers.
However, caution is warranted. Siddharth Maurya, Founder & Managing Director at Vibhavangal Anukulakara, warned that metals remain sensitive to global growth data, currency movements and interest rate expectations.
“For the near term, the trade looks supported as long as the dollar stays soft and the Fed remains dovish,” Dasani said. “But any abrupt US data surprise or renewed concerns around China’s exports could trigger sharp corrections.”
For investors, experts advise focusing on balance-sheet strength, cost-efficient producers and companies with strong domestic linkages, rather than chasing short-term price spikes in this cyclical rally.
