Hindustan Copper, Hind Zinc, other metal stocks rise up to 8% on China's 'proactive' fiscal policy, weaker dollar

Metal stocks jump

The shares of metal companies surged in trade on December 12, extending gains as China's recent announcement on 'proactive' fiscal policy boosted investor sentiment. Dollar’s weakness and Fed’s rate cut also supported the share prices.

The Nifty Metal index rose nearly 3 percent to 10,536.40, as seen at 1.50 pm on Friday, extending gains for the third consecutive session. The sectoral index emerged as the top gaining sector on the market today, nearing its 52-week-high level of 10,837.

China's fiscal stimulus:

Chinese leaders have promised to maintain "proactive" fiscal policy next year to stimulate consumption and investment to maintain high economic growth. The prospect of fiscal stimulus could ease worries over the slowdown seen in the second half of 2026 in almost every area of the economy that is not contributing to China's trillion-dollar trade surplus.

Pro-growth policies in China are a positive for metal demand and pricing since China is the top producer as well as consumer of the commodity

Weaker US dollar:

The US dollar has been falling against its major peers like Euro and Japanese Yen after US Federal Reserve’s FOMC meeting outcome. Chairman Jerome Powell indicated that the American central bank will likely pause its easing cycle at the next policy meeting in January.

"In considering the extent and timing of additional adjustments to the target range for the federal funds rates, the Committee will carefully assess incoming data," the Federal Open Market Committee said in a statement, a language that in the past has been used to signal a pause in policy actions.

It is important to note that while dollar weakens against some currencies, rupee has continued to decline against the greenback. The Indian currency hit a new record low on December 12, as sentiment remained bogged down by the absence of a trade deal with the US.

Fed rate cut:

US Federal Reserve on Wednesday announced its decision to cut interest rates by 25 basis points, marking a third consecutive cut. The cut brought down the rate to the 3.5 to 3.75 percent range, its lowest level since 2022.

A rate cut in the US could reduce borrowing costs for foreign investors, encouraging them to invest in higher growth markets in India. This boosts metal stocks.

The sharp rise in metal stocks also comes on the back of soaring metal prices, with silver hitting fresh lifetime highs.

Top metal gainers today:

Hindustan Copper and Hindustan Zinc shares were the top gainers on the index, surging over 8 percent and 6 percent respectively. National Aluminium Company (NALCO) shares rose around 6 percent, while Tata Steel shares rose more than 3 percent.

This came after the Tata Group company unveiled a series of major capital expenditure plans, including the expansion of long steel products capacity at its wholly-owned subsidiary Neelachal Ispat Nigam and the establishment of a 2.5-million-tonne-per-annum thin slab caster and rolling mill in Odisha. The company has also entered into a pact with Llyods Metals & Energy to partner in the areas of iron ore mining, logistics, pellet, and steel making.

Hindalco Industries, Vedanta and NMDC shares also gained more than 3 percent each, amid rising metal prices. Steel Authority of India (SAIL), JSW Steel and Jindal Stainless Steel shares gained nearly 2 percent each, while Jindal Steel & Power and APL Apollo Tubes shares rose around 1 percent each. Adani Enterprises shares were trading in the green with marginal gains.

Nifty Metal technical view:

The Nifty Metal Index has shown strong momentum with a sharp rebound from the 10,050– 10,100 support zone, aligning with the rising trendline and key EMAs, said Drumil Vithlani, Technical Research Analyst at Bonanza.

The analyst said that the recent breakout above the 20-EMA and a push toward the descending trendline indicate improving sentiment. "RSI has moved up to 58, reflecting strengthening bullish momentum without entering overbought territory. A sustained close above 10,500 would confirm a breakout from the corrective channel and open upside toward 10,650–10,750. On the downside, support remains firm at 10,150, and only a close below 10,000 would weaken the structure. Overall, the index outlook has shifted to positive," he added.

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