India’s metal stocks are on a strong rally, with the Nifty Metal Index climbing for the fifth consecutive session on Tuesday, gaining 4 percent over the past five days, as investors piled into steel and non-ferrous metal shares.
Over the past five days, several metal stocks have seen strong gains, reflecting renewed investor interest in the sector. Hindalco surged 9%, Vedanta rose 7%, Tata Steel added 5.5%, NALCO climbed 6%, Jindal Steel gained 7%, and NMDC Steel jumped 11%, among others. The broad-based rally has caught market attention, and in this article, we explore the key factors driving the surge in both steel and non-ferrous metal stocks.
Index Overview
The Nifty Metal Index opened at Rs. 10,465.85 with a flat opening and jumped upto 1.5 percent from its previous close of Rs. 10,467.15. The index reached a high of Rs. 10,624.65 in the day’s trade, and the index has rallied upto 4 percent from the last five trading sessions.
Reason for the rally
Global metal prices are soaring
Hindalco and Vedanta rose as much as 2% on Tuesday, tracking the continued rally in global metal prices. Copper has climbed past $10,600 per tonne, aluminium is steady around $2,850, and iron ore remains strong, supported by a weaker dollar and tightening supply conditions. China’s renewed export curbs on rare earth minerals have created a scarcity premium, lifting the strategic metals segment worldwide.
Foreign inflows and Fed cut hopes boost momentum
Foreign investors have turned net buyers in October, marking a shift after months of risk aversion. “FIIs are clearly rotating back into cyclicals, with metals attracting renewed inflows following a period of defensiveness,” said Dasani, Business Head, INVasset PMS..
Abhinav Tiwari, Research Analyst at Bonanza, added that expectations of another 25 bps Fed cut later this year “are fueling risk appetite and boosting demand for non-yielding assets such as metals.”
Domestic demand and policy support reinforce the outlook
India’s steel demand continues to show strength, expanding at a high single-digit pace despite the global manufacturing slowdown. “Steel consumption in India is likely to remain robust, growing by high single digits in FY26/27E,” said Prashanth Kumar Kota, CFA, Lead Analyst, Basic Materials at Choice Broking. Vedanta’s recent ₹1 lakh crore investment plan in Odisha, which includes new aluminium parks and a ferro-alloys plant, has further lifted sentiment in the sector.
Outlook: Strong Momentum Tempered by Caution
Dasani noted that the current rally isn’t merely cyclical but supported by improving earnings visibility and ongoing capacity expansion. However, he cautioned that slightly overbought conditions and key resistance levels could trigger short-term profit booking.
He added that “volume trends indicate the rally is fundamentally driven rather than speculative,” highlighting delivery-based buying and increasing open interest as positive indicators.
Written by Sridhar J
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