NALCO, Hindustan Copper, Vedanta shares slump up to 19% sink as metal rout deepens; Here's why

Shares of NALCO, Hindustan Copper and Vedanta led a sharp sell-off in metal stocks on Sunday after gold, silver and copper prices slumped, with Hindustan Copper sliding as much as 19% as a stronger U.S. dollar and profit-taking after a recent rally rattled commodity markets following U.S. President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair.

Shares of Hindustan Copper fell as much as 19% to Rs 554.65 on the BSE. Shares of NALCO (National Aluminium Company Ltd) fell as much as 11.6% to Rs 340.20, while Vedanta slid as much as 10% to Rs 614.45. Hindalco Industries declined as much as 10% to Rs 866. The Nifty Metal index crashed as much as 5% to 11,218.80.

Metal stocks took a heavy beating amid volatile metal prices on the global front, tracking a drop in global metal prices on a stronger dollar and profit-taking after a recent rally. The main trigger remained U.S. President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve Chair, as per experts.

The sell-off tracked a sharp correction in precious metals. Gold and silver futures opened sharply lower on the Multi Commodity Exchange (MCX) on February 1, extending the selloff after their worst-ever crash on Friday. Profit-taking and a strengthening US dollar emerged as key drivers behind the sharp correction. The MCX is open for trading on Sunday in a special session as the government presents the Union Budget 2026.

MCX Gold futures due April 2, 2026 were down Rs 9,140 or 6% to Rs 1,43,205 per 10 grams, while silver futures for March 5, 2026 delivery fell Rs 17,515 or 6% to Rs 2,74,410 per kg.

Copper prices also weakened overseas, with the London Metal Exchange price down 3.40% to $13,157 per metric tonne, adding to pressure on copper-linked stocks. Since Hindustan Copper’s performance is closely tied to copper price movements, the weakness in the base metal is expected to influence the stock’s trajectory.

Fed signal spooks commodities

The steep fall in precious metals came amid profit booking after the nomination of Kevin Warsh as the next U.S. Federal Reserve chief, which unsettled commodity markets as investors viewed him as a hawkish policymaker likely to prioritise inflation control and maintain tighter monetary conditions. Trump announced former Federal Reserve governor Warsh as his choice to lead the central bank, while a reading on inflation was stronger than expected.

Warsh, a frequent critic of the Fed, is seen as an advocate of lower interest rates, but also as someone who would stop well short of the more aggressive easing associated with some other potential nominees. He would take over when current Fed Chair Jerome Powell’s term ends in May, if he wins confirmation in a closely divided Senate.

With international markets shut, global cues will be absent, keeping the focus on local factors. Changes in import duties announced in the Union Budget 2026 could also influence domestic prices.

“Aside from the Budget, the crash in precious metal prices may bring investors back into equity,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)