This week, stocks of three Indian aluminium giants, Hindalco, NALCO and Vedanta, have slid downwards for two consecutive sessions. On February 25, shares of Nalco fell 10 per cent in two single-day trading sessions, whereas Vedanta and Hindalco lost 5 per cent to 7 per cent, respectively. Other known names, including Jindal, similarly lost up to 3 per cent on the same day.
This incident was a ripple effect of ascending scepticism around tariffs coupled with muted third-quarter earnings for the current fiscal. The Nifty Metal index fell by 1.2 per cent, with 11 out of its 15 constituents in the red.
Market analysts are predicting that this incident is not just a blip, but a sign of continued volatility. The shortened trading week and the impending derivatives expiry are historical factors that intensify market swings, and they are likely to follow a predictable pattern.
On Monday, the index experienced a sharp decline of 2.17 per cent, following five consecutive sessions of gains between February 14 and 21. During this period, the sector had risen over 5 per cent, driven by optimism surrounding robust domestic demand and decreasing raw material costs. The sudden decline starkly contrasts with the previous positive market conditions.
Among the three deficiency counters, Hindalco was one of the biggest Index losers intra-day. Above this, the entire market segment is seemingly slipping towards a loss as the BSE Metal Index is down 3 per cent YTD (45 days plus). Even for the past 6 months or so, it went down over 14 per cent.
The metal stocks have experienced significant declines, with Hindalco falling over 13 per cent in the past six months. However, it has seen a 4 per cent increase so far in 2025. In comparison, NALCO has dropped 14 per cent this year, while Vedanta has witnessed a decline of more than 7 per cent.
As a plethora of events materialise transnationally, from US President Donald Trump signing a memorandum restricting Chinese investment in strategic businesses to fluctuation in commodity prices, especially base metals, market stability is not an anticipated scenario by analysts in the near future.
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