Why Did Vedanta, Tata Steel, and Other Metal Stocks Jump Up to 6% Today?

Synopsis: India’s Nifty Metal Index rallied strongly, led by Vedanta, Hindustan Zinc, NALCO, and others, boosted by record silver and copper prices, geopolitical risk premiums, and robust industrial demand driving metal shares higher.

India’s metal stocks are on a strong rally, with the Nifty Metal Index climbing strongly after the recent pullback, and in the day’s session, it gained over 3 percent from the previous day’s close as investors piled into steel and non-ferrous metal shares.

In today’s session, several metal stocks have seen strong gains, reflecting renewed investor interest in the sector. Vedanta surges 6.2%, Hindustan Zinc 6%, NACL – 5%, Hind Copper 4%, Tata Steel 3.2%, among others. 

The broad-based rally has caught the attention as the metals stocks have outperformed while the equity market has been muted, and in this article, we explore the key factors driving the surge in both steel and non-ferrous metal stocks.

Index Overview

The Nifty Metal Index opened at 11,399.40 with a slight gap-up opening and jumped upto 3.2 percent from its previous close of 11,355.20. The index reached a high of 11,717.55 in the day’s trade, and the index has rallied more than 5 percent from the recent pullback.

Reason for the rally in the day’s trade

Silver has surged past the $90 per ounce threshold, marking a historic high. This sharp rally comes as geopolitical tensions escalate, particularly between the US, Iran, and the situation surrounding Venezuelan President Nicolás Maduro’s capture. These developments have contributed to a significant increase in the price of silver.

The ongoing geopolitical risks, especially linked to Iran and the US’s involvement in Venezuela, have added a risk premium to silver’s value. This has played a pivotal role in propelling silver to new price heights. The market is awaiting clarity on these tariffs by June, which could further influence silver prices. Meanwhile, the metal’s supply continues to face significant challenges, marking the sixth consecutive year of a supply deficit.

With its recent price surge, silver’s market capitalization has now crossed the $5 trillion mark, placing it among the world’s largest assets. In comparison, gold’s market capitalization stands at $32.17 trillion, highlighting the relative scale of these two precious metals. 

Silver has experienced remarkable growth recently, jumping by 14.5% in just one week. Year-to-date, prices have risen by 23%, and over the past month, silver has seen an impressive 35% increase.

Copper prices have surged to new record highs, driven by strong demand from the growing artificial intelligence sector. The metal’s increased use in data centers and electronics has become a significant demand trigger. 

Additionally, speculative trading in Beijing’s metal markets has fueled the rally, with trading values in Shanghai soaring by more than 260% year-on-year. Copper is now priced above $13,000 per tonne, with other metals like nickel, zinc, and aluminium also showing notable gains.

Metal stocks Rise 

Over the past week, copper prices have risen by 2.1%, with a remarkable 12.1% increase over the past month, reflecting the continued strength of the market. The surge in metal prices has had a direct positive impact on listed mining companies. Major players like Vedanta, Hindustan Zinc, Hindustan Copper and others have emerged as clear beneficiaries.

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