Indian metal stocks witnessed a powerful rally on Wednesday, November 26, with the sectoral benchmark index climbing close to 2% and extending its gains for a second consecutive session. The upswing was fueled by a wave of optimism on Dalal Street, supported by positive global cues as investors increased their bets on a potential interest rate cut by the U.S. Federal Reserve in December.
Key Performers and Index Movement
The Nifty Metal index emerged as one of the top performers in early trade, second only to the Nifty PSU Bank index. The benchmark metal index rose as much as 1.85%, reaching an intraday high of 10,260.45. This places it just 5% away from its all-time high of 10,837.45, which was recorded in October of the previous year.
This performance marks a significant rebound from the index's 52-week low of 7,690.20 hit in April 2025. In today's session, all constituents of the Nifty Metal index were trading positively.
- SAIL led the charge with a 4.5% jump to ₹138.30.
- JSW Steel followed closely, gaining 3.4% to ₹1,149.35.
- Hind Copper advanced nearly 3%, while Ratnamani Metals climbed around 2.5%.
Other major players including JSPL, Tata Steel, NALCO, NMDC, APL Apollo Tubes, Vedanta, Hindustan Zinc, and Hindalco Industries also saw gains of over 1% each.
November Weakness and Sector Outlook
Despite the recent surge, the month of November has been challenging for the metal sector. The index has shed 3.4% this month, putting it on track for its most substantial monthly decline in seven months. This weakness was primarily triggered by the Indian government's decision to extend exemptions from mandatory quality control orders for certain steel grades, a move that could allow more imports and pressure domestic producers.
Adding to the pressure has been the strength of the U.S. dollar, which makes dollar-denominated metals more expensive for holders of other currencies.
Looking ahead, brokerage firm Axis Securities has cautioned that the steel sector might see weaker pricing in the third quarter of FY26. Steel spreads could fall by 7% quarter-on-quarter if hot-rolled coil (HRC) prices do not improve. The brokerage highlighted several factors for investors to monitor, including:
- Potential stimulus measures from China.
- India's decision on extending the 12% safeguard duty on steel.
- The impact of US tariffs on steel imports.
- Any further production cuts in China.
Following the Q2 earnings season, Axis Securities has identified APL Apollo Tubes and Hindalco as its preferred picks in the metal sector. The brokerage has set a target price of ₹2,100 for APL Apollo Tubes, implying an upside of over 21%, and a target of ₹880 for Hindalco, suggesting a potential 10% gain.
Long-Term and Recent Performance
The long-term performance of the metal index remains impressive. Over a five-year period, the Nifty Metal index has delivered multibagger returns of 250%. In the past year, it has gained 15%, and it has advanced 10.5% over the last three months.
However, its monthly trajectory in 2025 has been volatile. Before the November dip, the index had risen 5.7% in October and 9.6% in September. It declined in August and July, but saw gains in June and May. Its worst monthly performance this year was a 5.6% drop in April.
