Metal Stocks: Once again a sharp rise is being seen in the shares of metal companies including Hindustan Copper…
highlights
- The rising trend in the shares of metal companies for the last few days continued even today, and the Nifty Metal Index reached its new high.
- It gained nearly 2 percent on the National Stock Exchange (NSE) in intraday trade on Thursday.
- Most of the metal stocks including Hindustan Copper are trading on a stormy note today.
In the past one month, the Nifty Metal index has gained 12 per cent, while the benchmark index has fallen 2 per cent. On Wednesday, January 28, Vedanta, Tata Steel, National Aluminum (NALCO), JSW Steel and Hindalco Industries hit new record highs in intra-day trading. Even on Thursday, January 29, in intra-day trading, these shares were trading in the range of 3 percent to 5 percent.
Shares of metal companies became a storm
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- Hindustan Copper- ran 15 percent
- Vedanta – up 2 percent
- JSW Steel- up 1 percent
- Tata Steel – up 1.32 percent
- NALCO – up 3.25 percent
- Hindalco Industries- 2.53 percent rise
Why are these stocks running away?
The metal and mining sector has many expectations from the upcoming Union Budget 2026. The first expectation is to increase the basic custom duty on all aluminum products from the current 2.5-10 percent to a uniform 15 percent. The second hope is related to reduction in custom duty on calcined pet coke, raw pet coke, aluminum fluoride and caustic soda.
Additionally, the Indian Steel Association (ISA) has advocated reducing or removing the 2.5 per cent basic custom duty on coking coal. Also, the Federation of Indian Mineral Industries (FIMI) has requested the government to remove export duty on low-grade iron ore. Policy-related steps for critical minerals are also in the eye of investors.
If custom duty on aluminum is increased, it can improve the pricing power and profitability of domestic aluminum companies like NALCO, Hindalco, Vedanta. Similarly, any cut in pet coke could reduce aluminum production costs for all three stocks.
Any reduction in 2.5 per cent basic custom duty on coking coal could reduce the production cost of steel companies like Tata Steel, Jindal Steel, JSW Steel and SAIL. Removal of export duty on low-grade iron ore can help in the sale of low-grade iron ore fines and is considered beneficial for NMDC.
A new policy is expected to be introduced in Budget 2026 to reduce dependence on imports by increasing domestic production of silver, copper and zinc, Axis Securities said in a report. The focus will be on increasing private sector participation in mining and processing, as well as incentives to improve silver recovery as a by-product to support the “Make in India” initiative.
What will be the impact of India and EU trade deal?
Prime Minister Narendra Modi on Tuesday, January 27, 2026, announced the signing of a Free Trade Agreement (FTA) between India and the European Union (EU). After this, new avenues are seen opening for metal companies.
The India-EU trade deal includes provisions to reduce import duties on aluminium, copper, zinc, nickel, lead and tin to zero from the current 10 per cent, as well as talks to increase steel export quotas.
Indian producers exporting to Europe are expected to benefit from the reduction in duty on aluminium. As the largest aluminum producers in India, Hindalco Industries, Vedanta Aluminum and NALCO are set to benefit.
Metal stocks on fire due to global copper rally
The biggest trigger for the fresh rally in metal stocks is the new rise in global copper prices. Copper prices have reached record levels amid geo-political tensions, trade uncertainty and a weak dollar.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice in any way. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions.
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