Metal stocks emerged as the top performers in Tuesday's trading session, with the Nifty Metal index rising 3.2% while the benchmark Nifty edged up 0.1%. According to reports from The Economic Times, of the 15 index constituents, 14 advanced, led by steel and non-ferrous players. Sunny Agrawal, head of fundamental research at SBI Securities, noted that "the gains in base metal prices led the uptick in metal stocks." The rally gained further momentum as the Australian All Ordinaries Index rose 2.35%, supported by strength in materials, gold and selected mining stocks as commodity prices remained elevated. As per WA Index data, the WA index rose 2% on the back of the same sectors, reflecting the global strength in base metals.
Steel Authority of India led the gains with a rise of over 14%, while Vedanta and Hindustan Copper gained 6.2% and 5.4% respectively. As reported by The Economic Times, Tata Steel, Hindustan Zinc and Hindalco climbed more than 3.5% each. The rally was supported by copper surging towards record highs on the London Metal Exchange, driven by supply disruptions at a major mine and rising demand linked to artificial intelligence infrastructure. According to Jateen Trivedi, VP research analyst at LKP Securities, companies such as Hindustan Zinc, Hindustan Copper and Vedanta remain preferred picks for continued outperformance.
According to Kotak Neo in a client note reported by The Economic Times, LME base metals extended gains as tightening supply conditions and resilient industrial demand outweighed pressure from a stronger dollar and ongoing US-Iran tensions. Aluminium gained on Gulf supply concerns and falling inventories, while nickel advanced on improved stainless-steel demand. The outlook for metal stocks remains closely tied to underlying commodity prices, with metals like copper, aluminium and zinc benefiting from growth in renewable energy and electric vehicle ecosystems. The Australian market's strength reflects broader global commodity optimism, with gains more modest than in the US and Japan due to Australia's smaller technology weighting and ongoing domestic headwinds from higher interest rates, inflation pressures and cautious consumer sentiment.
Gold financing companies also advanced after the government raised customs duty on gold and silver to 15% from 6%, a move aimed at curbing imports and easing pressure on foreign exchange reserves amid geopolitical tensions. As reported by The Economic Times, gold futures on MCX jumped 5.6% while silver rose 6.4%, lifting sentiment for companies reliant on gold-backed lending. Among gold financiers, Manappuram Finance and Muthoot Finance gained 5.6% and 4.6% respectively, while IIFL Finance rose 4%. According to Trivedi, "in the short term, higher domestic gold prices increase the value of pledged jewellery, which can improve collateral coverage and support loan growth."
According to Jateen Trivedi from LKP Securities, the optimism in metal stocks is likely to continue as demand for these metals is anticipated to remain strong. However, analysts cautioned that volatility in global prices could drive near-term swings in stock performance. Sunny Agrawal from SBI Securities noted that the sustainability of the rally will depend on commodity prices, stating that if prices remain elevated, the momentum could continue, while any correction may lead to some decline. The global nature of the rally, with strong performance in both Indian and Australian markets, suggests continued strength in base metals across major economies.
