Hindustan Zinc, Nalco, Vedanta, SAIL, Hindustan Copper, To Hindalco: Why Are Metal Stocks Falling Today?

Shares of Hindalco, Nalco, SAIL, Vedanta, Hindustan Zinc, Hindustan Copper, and other metal companies saw a massive decline during Friday's intraday trading session. The massive fall in metal stocks today coincided with a sharp decline in commodities' prices.

Nifty Metal was down close 1.52% on Friday at 3 pm. Hindustan Zinc's share price today emerged as the biggest laggard of the thematic index, with its 6% fall during the trading session. Nalco, Vedanta, SAIL, Hindustan Copper, Hindalco, NMDC, and Tata Steel were down close to 4.53%, 3.86%, 3.34%, 2.58%, 2.49%, 1.93%, and 1.75%, respectively.

Why Are Metal Stocks Falling Today?

The decline in metal stocks came as overall weaker sentiment prevailed across the Indian stock market. Nifty 50 was down close to 0.28% near 23,350 points. BSE Sensex was also down close to 0.19% and was expected to end Friday's trading session marginally lower.

Decline base metal commodities prices could be another reason that might have triggered a sharp sell off in these metal stocks. MCX Aluminium Futures was also down around 1% during Friday's trading session. Copper Futures, with 30 June expiry, were down more than 1.5%. Zinc Futures, with 30 June expiry, were nearly 0.9% lower. Likewise, Lead Futures, with 30 June expiry, were trading 0.12% lower

The recent decline in metal stocks has come weeks after the segment remained as the top performer. Nifty Metal has delivered close 28.32% return in six months and has surged more than 2% in May month. The monthly gain of metal stocks in May coincided with strong momentum in base metal prices.

In May last week, aluminium prices touched their all time high amid global supply concern. Last month, Morgan Stanley had shared a positive view on aluminium. The brokerage mentioned a good medium-term outlook, citing strong demand coming from sustainability needs. Supply growth remains quite limited globally as China has capped its smelter capacity, as per the brokerage report.

Aluminium prices will likely remain firm soon as several key factors support this near-term trend. Meanwhile, global supply chain disruptions due to geopolitical tensions like West ASia crisis will also impact the metal's long-term demand outlook.

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