Metal stocks tumbled up to 5% on Monday, with the Nifty Metal index falling over 2% and emerging as the worst-performing sectoral index, according to The Economic Times. Hindustan Zinc led the losses with shares declining around 5%, while Vedanta and National Aluminium Company (NALCO) fell nearly 4% each. Hindalco dropped 3%, Tata Steel, Adani Enterprises, Jindal Stainless Steel, JSW Steel, NMDC, Welspun Corp and other metal stocks declined up to 2%. The sharp drop came despite the sector's strong 8.74% gains in August that had made it the top performer among Nifty sectoral indices.
Markets currently see a 57% chance of a rate hike at the Fed's next policy meeting in September, against 36% before Warsh's comments, according to the CME FedWatch tool as reported by The Economic Times. Aluminium, copper and other metals declined as expectations of higher-for-longer US interest rates outweighed supply concerns that had earlier supported a monthly rise in August. The Nifty Metal index had sharply surged more than 6% in August so far, outperforming major sectoral indices amid supply concerns, but profit booking after this strong rally also weighed on sentiment.
The steel sector's resilience was driven by rebar prices jumping 13.8% from July 2026 trough levels, with the per-tonne rebar price in August recovering 13-14% to ₹54,500 from a low of ₹47,900 in late July 2026, as reported by Business Standard. Hot-rolled coil (HRC) prices stayed resilient due to controlled supply and robust automobile industry demand, with passenger and commercial vehicle sales up 21% year-on-year between January and July. Despite the surge, Indian steel continued to trade 5.6% cheaper than imported Chinese steel, maintaining demand for local mills thanks to the 12% provisional safeguard duty imposed in April.
Major steelmakers are sharpening their focus on value-added steel as end-user industries such as automotive, appliance, and construction demand higher-performance products and move towards premium offerings. According to Business Standard, JSW Steel's India capacity today is 36.4 mt, including the joint venture Bhushan Power and Steel, and now the share of value-added special products steel is 60% of the sales volume, up from 25% when capacity stood at about 14 million tonnes in 2014. Tata Steel aims to take its overall downstream products from the current 35-40% to roughly 60% by volume, with T V Narendran, MD and CEO of Tata Steel noting that downstream has more value due to strong franchise and good position in high-end markets including a 50% market share in automobiles. Jindal Steel MD V R Sharma said more than 60% of the company's production should eventually be value-added, with at least 7 mt-plus of 12-12.5 mt capacity dedicated to value-added products.
Jefferies remains bullish on Hindustan Zinc shares, raising its target price to ₹750 apiece while maintaining its 'Buy' call, as reported by The Economic Times. The international brokerage believes zinc and silver are shining brighter than aluminium. Jefferies also raised its target price for Hindalco Industries to ₹1,140 apiece, but has a 'Hold' call on the stock, preferring Hindustan Zinc shares over Hindalco Industries. In comparison, aluminium prices are 10% below their June-quarter average, with Jefferies noting that while supply disruptions in the Middle East led to a 4% YoY decline in global production in the first half of 2026, a 2% increase in Chinese output largely offset the decline, keeping global production broadly stable.
