Hindustan Copper shares rally 15% in 2 days. What's behind the surge?

Synopsis

Hindustan Copper shares surged nearly 15% in two sessions after the state-owned miner emerged as the preferred bidder for a new copper block in Madhya Pradesh, reinforcing investor optimism amid a strong global metals rally and bullish technical signals.

Hindustan Copper shares jumped nearly 15% over the past two sessions, climbing as much as 9.4% on Wednesday to Rs 615, after the state-owned miner disclosed that it had emerged as the preferred bidder for a new copper block in Madhya Pradesh, an announcement that reinforced investor optimism around its growth prospects amid a buoyant global metals market.

The stock extended gains for a third straight day on Wednesday, Jan 28, building on a 5% rise on Tuesday that followed a weekend packed with corporate disclosures. On Friday, the shares had edged up 0.7% to close at Rs 535.55 on the BSE, up from Rs 531.80 in the previous session.

New copper block

In a regulatory filing on Saturday, Hindustan Copper said it had been declared the “Preferred Bidder” for the Baghwari-Khirkhori copper and associated mineral block in Madhya Pradesh. The company participated in the state government’s e-auction for the grant of a mining lease and composite licence for the block.

According to the filing, the forward e-auction was successfully concluded on January 22, with Hindustan Copper emerging as the frontrunner after submitting the highest final price offer. The company said the acquisition aligns with its broader strategy to secure raw material resources, at a time when global demand for copper continues to rise.

Strong run fuelled by metals rally

The latest move adds to an already sharp rally in the stock. Hindustan Copper shares have surged nearly 139% over the past six months, a run that market participants have attributed to the sustained upswing in the commodity cycle, with metal prices hitting record levels.

From a technical perspective, the stock is trading above all eight of its key simple moving averages, the 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day SMAs, signaling bullish momentum across short- and long-term charts.

The Relative Strength Index stands at 63.5, with readings below 30 considered oversold and above 70 overbought. Meanwhile, the Moving Average Convergence Divergence is at 33 and remains above its center line, though below the signal line, indicating continued strength with some near-term consolidation signals.

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