Metals Sell-off: Hindustan Zinc, NALCO, Vedanta fall up to 5% after record rally

Shares of Metal companies, Hindustan Zinc Ltd., Hindustan Copper Ltd., NALCO Ltd., Vedanta Ltd., and other stocks are witnessing selling pressure on Thursday, January 8, after a record rally that took most of these names to either record or multi-year highs.

All 15 stocks on the Nifty Metal index are trading with losses on Thursday.

Hindustan Zinc is the top loser on the Nifty Metal index, trading with losses of nearly 5%. The stock has declined in three out of the last four trading sessions. The Vedanta subsidiary had gained 26% in the month of December.

Hindustan Zinc is the only Indian listed company to play the Silver theme.

According to Citi, Silver could see outflows worth up to $7 billion as part of the Bloomberg Commodity Index annual rebalancing exercise, which will take place between January 9 to January 15. As part of the rebalancing, no commodity can exceed the 15% weightage cap.

Societe General expects net selling in Silver to the tune of $5 billion, while TD Securities warns that 13% of Open Interest in Comex Silver is likely to be sold as part of this exercise.

Hindustan Copper, whose shares had risen to a 15-year high after a 58% surge in December, are also down for the second-day running, having snapped a four-day gaining streak on Wednesday.

NALCO is the second-biggest loser on the Nifty Metal index, along with JSPL, both of which are trading with losses of 4% each.

"If you are talking of Hindustan Copper as well as Hindustan Zinc, most of the run has happened. We can see some more upside because there is momentum. But from an investment perspective, I would still suggest ferrous and aluminium. So one should be looking at Tata Steel or JSW Steel, NALCO and Hindalco because although we have seen a decent move up in the last one year, but the full potential we should see in 2026. In fact, for Tata Steel, I have a price target of over ₹250," Ambareesh Baliga, independent market expert told CNBC-TV18 on January 5.

The Nifty Metal index is currently the top sectoral loser in the market on Thursday.