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News Topical, Digital Desk : Even though the stock market is under pressure, metal stocks continue to shine. On January 29th, the metal index continued its strong rally for the third consecutive day, reaching record levels. Hindustan Copper became the biggest star of this rally, with its stock jumping 18 percent to an all-time high. The question is, why is there such strong buying in metal stocks amid market weakness?
The metal sector once again surprised the market on January 29th. While the Sensex and Nifty traded in the red, the Nifty Metal Index rose for the third consecutive session, reaching a record high. The index rose more than 2% in morning trading to 12,359.05.
Hindustan Copper was the biggest beneficiary of this rally. The company's shares jumped nearly 18 percent to an all-time high of ₹745. Surprisingly, the stock has risen nearly 305 percent since its 52-week low of ₹183.82 in April. This means investors' money has more than tripled in just nine months.
Major reasons for the rise in Hindustan Copper
Hindustan Copper's recent rally is driven by significant company-specific news. On January 24th, the company announced that it had become the preferred bidder for the Baghwari-Khirkhori Copper and associated mineral block in Madhya Pradesh.
The company participated in the state government's e-auction for mining leases and composite licenses. Since it placed the highest final bid, it was declared the preferred bidder for the block.
Following this news, the stock has risen nearly 39% in just three trading sessions. Furthermore, the sharp rise in global copper prices has also provided strong support.
Copper prices are projected to rise by nearly 60% in 2025. Experts believe that long-term copper demand remains strong due to rising demand from electric vehicles, renewable energy, and infrastructure.
Why is there a rally in metal stocks?
There are many reasons for the surge not only at Hindustan Copper, but across the entire metals sector. First, regarding precious metals, both gold and silver hit record levels today.
Gold futures on MCX jumped nearly 9 percent to an all-time high of ₹1,80,779 per 10 grams. Silver also rose nearly 6 percent to a new record high of ₹4,07,456 per kg. This created positive sentiment across the metals space.
Furthermore, the Federal Reserve's decision to keep interest rates stable also supported metals. Investors are turning to hard assets amid high inflation and geopolitical uncertainty.
The domestic picture also appears strong. In December, the Index of Industrial Production (IIP) growth reached a 26-month high of 7.8 percent, driven largely by the mining and power sectors.
This indicates that industrial activity is improving, which is positive for metals companies. Additionally, the market is hopeful that the upcoming budget may include major announcements related to manufacturing and infrastructure.
The rally in other metal stocks
wasn't limited to Hindustan Copper. National Aluminum Company rose nearly 4 percent. Jindal Steel also gained nearly 4 percent. Hindalco Industries, Vedanta, NMDC, and Tata Steel rose nearly 2 percent. Meanwhile, SAIL, Hindustan Zinc, and JSW Steel gained more than 1 percent.
However, not every stock was in the green. APL Apollo Tubes, Adani Enterprises, and Welspun Corp declined up to 1 percent.
Overall, the current rally in the metal sector is a result of company-specific news, rising global prices, and strong domestic data. Hindustan Copper has emerged as the poster boy for this rally.
If global commodity trends and budget expectations persist, metal stocks could see further movement.
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