Twelve out of 15 stocks in the NIFTY Metal index were trading lower led by Hindustan Copper’s nearly 15% slide. Hindustan Zinc, Vedanta, National Aluminium Company, Hindalco, NMDC, Tata Steel and Jindal Steel also fell between 1.3%-10%.
Shares of the country’s leading commodity exchange also came under selling pressure mirroring losses in metal stocks. Multi Commodity Exchange (MCX) shares dropped as much as 10% to ₹2,275.
Gold, silver, aluminium and copper prices crashed on the special budget trading session on Sunday.
Gold futures for delivery on February 5 dropped 6% to hit an intraday low of ₹1,40,674 per 10 grams and silver futures for delivery on March 5 tumbled 6% or ₹17,515 to ₹2,74,410 per kilogram, data from MCX showed.
Copper futures for delivery on February 27 dropped as much as 9% to ₹1,177 per kilogram and aluminium future for delivery on February 27 dropped 4.6% to ₹299 per kilogram.
The stocks in metal space came under sharp selling pressure after price of silver futures in global markets tumbled over 30% in a single session on Friday.
According to a report by CNBC, spot silver crashed 28% to $83.45 an ounce on Friday, trading near its lows of the day. Silver futures plummeted 31.4% to settle at $78.53, marking its worst day since March 1980.
Meanwhile, spot gold slipped around 9% to trade at $4,895.22 an ounce. Gold futures dropped 11.4% to settle at $4,745.10.
According to analysts, aggressive profit-taking followed the sharp rally to record highs earlier this month.
The key trigger behind the steep decline was President Donald Trump’s nomination of Kevin Warsh as the next US Federal Reserve Chair.
The nomination of Kevin Warsh as the next US Federal Reserve chief spooked commodity markets, as investors viewed him as a hawkish policymaker likely to prioritise inflation control and maintain tighter monetary conditions.
This shifted expectations toward higher interest rates for longer, boosting US bond yields and strengthening the dollar. Since commodities are priced in dollars and do not offer interest income, a stronger dollar and higher yields reduce their attractiveness, particularly for precious metals such as gold and silver.
As of 9:40 am, NIFTY Metal index was top sectoral loser on the National Stock Exchange and it traded 3.1% lower, underperforming the NIFTY50 index which was down 0.1%.