The Indian stock market’s metal pack suffered a rude jolt as silver and copper prices cratered worldwide, fueling a savage 6.35 percent drop in leading shares. This marked a stark reversal from the sector’s buoyant run, catching many off-guard.
Hindalco Industries spearheaded the decline at 6.35 percent, erasing two days of gains in one fell swoop. Vedanta and other miners trailed with 5-6 percent cuts, as the BSE Metal index cratered 4.5 percent.
Global cues dominated. Copper futures on LME shed 3 percent to $9,420, tripped by bearish Shanghai premiums turning negative. Silver mirrored the slide, down 3.5 percent as ETF outflows accelerated.
Fundamentals revealed cracks. China’s property bailout fell short of expectations, curbing copper wire and pipe demand. US manufacturing ISM at 47.2 confirmed recessionary pressures, denting optimism.
‘Supply chain disruptions are easing, leading to inventory rebuilds,’ observed a veteran analyst. LME copper warrants jumped 15 percent week-on-week, a classic oversupply signal.
Domestically, rupee weakness at 83.90/USD amplified imported raw material costs, squeezing margins further. This combo crushed EBITDA forecasts for Q3.
Notable casualties included MOIL (6.1% down) and NMDC (4.8% off), reflecting broad pain across base and precious metals.
Technically, momentum indicators flashed oversold. RSI for Nifty Metal hit 28, hinting at potential bounce. However, downside risks linger until $9,300 copper support holds.
Strategic plays emerged. Long-only funds trimmed exposure, while hedgers upped short positions. Bargain valuations tempt contrarians eyeing 20-30 percent upside on demand revival.
In conclusion, today’s rout underscores metals’ cyclical risks. Investors must balance near-term turbulence against long-term electrification megatrends. Selective patience, not panic, will reward the astute.