Nifty Metal Hits Record High as Copper, Aluminium Rally on Weak Dollar

The Indian metals sector witnessed a spectacular bull run on Thursday, January 29, with key constituents like Hindustan Copper, National Aluminium, and Jindal Steel Power defying broader market weakness. This surge was propelled by a record-breaking rally in base metal prices, driven by a weakening US dollar, heightened demand for tangible assets, and escalating geopolitical tensions under the Donald Trump administration's assertive foreign policy.

Top Performers Lead the Charge

Among the standout gainers, Hindustan Copper stole the show, skyrocketing 19% to an unprecedented all-time high of ₹743 per share. National Aluminium followed closely as the second-biggest gainer, climbing 3.8%, while Jindal Steel Power advanced 3.6%. Other notable index constituents also posted solid gains:

Hindalco Industries
NMDC
Vedanta
Tata Steel
SAIL
Hindustan Zinc

These stocks rose between 1% and 3%, contributing to the sector's robust performance.

Nifty Metal Index Scales New Heights

Tracking the strong rally across individual stocks, the Nifty Metal index soared to a fresh record high of 12,399, marking a 2.42% increase. This extended its record-breaking run to a fourth consecutive session. The index has surged 10.60% in January alone, delivering its best monthly performance since March 2025. Impressively, the metals sector has significantly outperformed the Nifty 50, which declined 3.22% over the same period.

US Dollar Weakness Fuels the Rally

The US dollar index continued its downward trajectory, slipping 0.26% to 96.02, hovering near a four-year low. This weakness persisted despite the US Federal Reserve keeping interest rates unchanged on Wednesday. The greenback had plunged 1.28% in Tuesday's session to touch a four-year low of 95.55, following remarks from US President Donald Trump. He expressed indifference toward the dollar's decline, stating it had not fallen excessively.

Further pressure on the dollar came from Trump's announcement of an impending pick for the next Federal Reserve chair and his prediction of declining interest rates under new leadership. Speculation about potential US-Japan currency intervention to support the yen added to the greenback's woes, though Treasury Secretary Scott Bessent later dismissed such moves, affirming support for a stronger currency.

The world's reserve currency fell over 9% in 2025, its steepest annual decline since 2017, and has lost another 2.3% in early 2026. This depreciation makes precious and base metals more affordable for holders of other currencies, boosting demand.

Base Metals Extend Record Run

Base metals maintained their upward momentum, with benchmark three-month copper futures on the London Metal Exchange (LME) surging 6.7% to a fresh all-time high of $13,967 per tonne, bringing year-to-date gains to 12%. Copper's rally mirrored record highs in gold and silver, as investors flocked to physical assets amid rising geopolitical risks, including Trump's threats against Iran over nuclear weapons.

Investors have particularly targeted metals critical to major growth markets. Aluminium remained firm, with the most active contract rising 3.08% to 25,630 yuan per ton, while the London benchmark climbed 1.87% to a four-year high. Other LME metals also posted gains: