Business
After blockbuster 2025, metal stocks tumble up to 10% weekly this year. What’s ahead?
Even as investors’ wealth wiped out by nearly Rs 9 lakh crore in the first seven sessions in the new year, commodities were at the fore-front of the sell-off with metal as the second worst-hit sector after the Oil & Gas.
Nifty Metal index‘s 3% weekly decline was largely triggered by a correction in the last two trading sessions. Individually, Jindal Stainless was the worst performer, slipping 10% over a week. It was followed by Welspun Corp and Jindal Steel which fell 7%, each. Others like Lloyds Metals & Energy, Adani Enterprises, NMDC, Hindustan Copper, Hindustan Zinc, Hindalco Industries, Tata Steel, APL Apollo Tubes, JSW Steel, Steel Authority of India (SAIL) and Vedanta were down between 6% and 1%. The lone gainer was National Aluminium Company (NALCO) with 5% uptick.
After the US President Donald Trump greenlit a bipartisan Russia sanctions bill that proposes duties of at least 500% on Russian imports, domestic markets fell sharply.
As the concerns around its impact weigh, sectors that have outperformed over a period, run a greater risk of correction.
Jashan Arora, Director at Master Trust said that metal sector’s super rally in 2025 was not just a momentum play, but a structural change that is expected to gain much dominance through the coming period. “Commodities cycle in 2025 beat all asset classes in 2025 with leading performance by various metals including gold, silver, copper and zinc and the long-term outlook for the metal remains constructive,” Arora said.
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Metal stocks’ performance
The Nifty Metal index’s past one year returns makes it the second best sectoral performer, behind Nifty PSU Bank whose returns stand at 37%.
Hindustan Copper, tops the chart with multibagger returns of 121% in the past 12 months and is followed by NALCO (75%) and Hindalco Industries (53%). The stocks have benefitted from strong gains in base metals like copper and aluminium.
Vedanta, Hindustan Zinc, Tata Steel, SAIL, JSW Steel, NMDC, Jindal Stainless and APL have double-digit returns above 20%. Meanwhile, the laggards are Lloyds, Adani Enterprises and Welspun, falling up to 12% over a one-year period.
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2026 outlook
Drumil Vithlani, Technical Analyst at Bonanza remains positive about the metal sector, attributing the ongoing strong trends to improving global metal prices and expectations of higher infrastructure and energy-transition demand.
Technically, Nifty Metal has entered a strong bullish phase after breaking out of a long consolidation zone, supported by rising volumes and improving momentum, he said. “The index is trading firmly above its key moving averages, indicating a well-established uptrend. Higher highs and higher lows on the daily and weekly charts reflect sustained buying interest. RSI remains in a healthy bullish zone, suggesting strength without signs of exhaustion,” Vithlani said.
Arora of Master Capital said that the outlook for metals remain constructive with commodities increasingly becoming integral part new-age technologies and evolving consumption patterns rather than being purely cyclical trades.
“Mining and allied companies stand at the forefront, especially with their monopoly type positions within the country, where rising prices directly flow into earnings and rise in margins with limited competitive pressure. Producers linked to copper, aluminium, and zinc continue to benefit from demand driven by infrastructure spending, power transmission, EVs, and the broader energy transition,” he added.
Q3 expectations
Brokerage Emkay sees a mixed Q3 quarter for metals & mining firms, with ferrous earnings under pressure from weaker realisations and higher coking-coal costs, driving sequential EBITDA declines. In contrast, non-ferrous earnings should remain healthy, led by aluminium and zinc price gains, supporting strong performance at Vedanta and NACL Industries, while Hindalco should see a special quarter owing to lingering Novelis headwinds.
Mining and others present a mixed picture, with Coal India’s EBITDA rebounding sequentially on higher offtake.
Stocks to buy
Vithlani of Bonanza finds Vedanta a strong bet within the metal space based on its technical. The stock has delivered a long-term breakout above its multi-year resistance zone, indicating a structural trend reversal into a sustained uptrend. “Price is trading well above all key moving averages, which are positively aligned, confirming trend strength,” he added.
Vithlani sees a healthy pullback in Hindustan Copper from the current highs. He placed a strong support in 475–450 zone and said that the momentum remains constructive as long as the stock sustains above its breakout support and the higher-high and higher-low structure stays intact.
On Hindustan Copper, Arora said that the company is India’s only vertically integrated copper ore producer and it occupies a strategically important position. But after a strong re-rating, much of the optimism seems already being reflected in current pricing, he opined, adding that at current valuation, the stock is suited for tactical positioning to benefit from ongoing commodity lead momentum with measured entries and exits.
Emkay has a buy view on Tata Steel, SAIL, Hindalco, Vedanta and NACL.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
