Shares of Hindustan Copper are on a roll and are hitting new highs every other day. In today's session yet again it has hit a high of Rs. 140 per share, surging again over 9%.
Reason for the surge in the counter of Hindustan Copper
There is a demand and supply gap for the base metal copper after the economies' are coming back on track. Spot prices of base metals like copper have gone higher than the future prices. Also, government's push to support electric vehicles and expectations of higher investors is drawing investors' interest in commodity stocks.
"Expectations of a historic deficit of raw material amid rising demand, signal of tightness on London Metal Exchange (LME), hopes of the US and Europe stimulus, revival of global inflation, and clean-energy transition have changed sentiment over the past one and a half month," says N S Ramaswamy, head of commodities at Ventura Securities.
Also, the factors pushing up the demand for copper and hence the scrip of Hindustan Copper
1. Demand from the power sector owing to govt's focus on renewable energy.
2. Increasing demand from households for consumer durables in the country.
Hindustan Copper is primarily involved in mining and processing of copper ore to produce refined copper metal.
Fresh buy in the scrip is not suggested but those having positions in the counter can continue to ride this trend until any reversal signs are seen suggests Angel Broking.