Metal Stocks Slip Amid Global Growth Concerns, Weak Base Metal Prices, and RBI Caution

Metal Stocks Plunge Amid Cautious RBI Policy Outlook and Global Weakness

Metal stocks faced significant pressure on Friday, pulling the Nifty Metal index to the bottom of the sectoral leaderboard. The Nifty Metal index plummeted 1.6 percent in afternoon trade, making it the worst-performing sectoral index on the National Stock Exchange (NSE). The broader market remained relatively stable, with the Nifty down 0.25 percent.

The weakness was evident across the metals pack. Hindalco Industries declined 2.5 percent and emerged among the top losers on the Nifty 50 index. Tata Steel fell 2 percent, while JSW Steel dropped 1.7 percent. The selling pressure was even sharper among midcap metal stocks. National Aluminium Company (NALCO) slumped nearly 5 percent to become the top loser on the BSE Midcap index. Steel Authority of India (SAIL) fell 3.4 percent, while NMDC declined 2.2 percent.

A closer look at the performance of larger mining and metals names reveals that Hindustan Zinc dropped 5.5 percent and Vedanta fell 4.1 percent, making them the two worst performers on the Nifty 100 index. Hindustan Zinc shares also came under pressure after a Bloomberg report suggested that the government is considering selling up to a 2 percent stake in the company. The decline weighed on parent Vedanta, whose valuation is increasingly anchored by its majority holding in the zinc producer.

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The metals sector took a hit after the Reserve Bank of India (RBI) left interest rates unchanged at 5.25 percent and retained its neutral policy stance. The central bank warned that rising energy prices, global supply disruptions, and geopolitical tensions have increased risks to both inflation and growth. The RBI also lowered its FY27 GDP growth forecast to 6.6 percent from 6.9 percent and projected inflation at 5.1 percent for the year.