Metal Stocks Drop Up To 3% As Stronger Dollar Hits Base Metal Prices

Metal shares witnessed sharp selling pressure on November 18, driven by a stronger US dollar and weakening global sentiment for commodities. The Nifty Metal index fell the most among major sectoral indices, trading 1.5% lower at 10,325.

Stronger Dollar Weighs on Copper & Aluminium

Base metals such as copper and aluminium extended their decline, as a stronger dollar made dollar-denominated commodities more expensive for global buyers.
A stronger dollar typically pushes metal prices lower, hurting investor appetite.

On the same day, the US dollar index remained steady at 99.5, while most Asian currencies weakened between 0.1% and 0.6% ahead of crucial US economic data releases.

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Hindustan Zinc & Hind Copper Lead Losses

Within the metal pack, Hindustan Zinc and Hindustan Copper were the biggest losers, each dropping 3%.
SAIL (Steel Authority of India) also witnessed selling pressure, falling over 2% during the session.

Fed Rate Cut Hopes Fade

Sentiment weakened further as expectations of a US Federal Reserve rate cut in December declined.
The probability of a 25 bps cut on December 10 dropped to 42.9%, down sharply from 62.4% last week, according to CME FedWatch.

Higher US interest rates generally strengthen the dollar, reducing demand for metals priced in USD.
They also make emerging markets such as India less attractive for foreign investors.

Markets Await Key US Data

Investors were awaiting key developments, including:

• The US nonfarm payrolls data (due Thursday)

• Signals on whether the Fed will cut rates in the upcoming policy meeting

Geopolitical Tensions Add Pressure

Market participants were also monitoring the diplomatic spat between China and Japan, raising concerns about potential disruptions in commodities trade between the two major economies.

Risk-Off Sentiment Hits Industrial Metals

Industrial metals were hit by a broader risk-off mood ahead of key global events. Several Fed officials have recently cautioned against reducing rates too soon, adding to demand worries.

Aluminium Price Movements

Aluminium prices had surged to a three-year high in early November, supported by strong Chinese demand and supply constraints. However, prices have drifted lower along with other metals due to concerns about US economic conditions.

Regional Market Dynamics

Despite the overall dip in metal prices, some region-specific developments were noted:

• Rio Tinto imposed surcharges on aluminium supplied to the US due to lower inventories following tariff-driven supply tightness.

Nifty Metal Index: Year-to-Date Trend

Despite today’s fall, the Nifty Metal index has gained 19.5% in 2025, more than double the benchmark index’s growth of 9.5%.

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