Hindustan Zinc shares crash 13% as silver prices tumble 15% after record bull run

Hindustan Zinc share price

• Hindustan Zinc shares dropped 13% as silver prices crashed post-record rally.
• Silver prices on COMEX dropped over 8 percent, futures fell up to 15 percent
• Silver ETFs also plunged, with Axis Silver ETF crashing 24 percent

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The shares of Hindustan Zinc tumbled nearly 13 percent on January 30 as silver prices crashed after a record rally.

The shares of the Vedanta Group-company dropped to Rs 622.85 apiece in the afternoon trading hours of Friday. This came amid a sharp drop in silver prices in the second session.

Silver prices tumble:

Silver prices on COMEX dropped around 14 percent to $98.685 per ounce. This comes a day after the precious metal hit a fresh lifetime high of $119.51 per ounce.

Silver futures with March expiry meanwhile dropped 15 percent to Rs 3,39,910 per kilogram. The contracts with May and July expiries also fell 15 percent and 12 percent respectively.

The sharp fall in global prices of the precious metals comes amid speculations that the US Federal Reserve may get a more hawkish chair. US President Donald Trump said he intends to announce his pick to replace Fed Chair Jerome Powell on Friday, as speculation intensifies over who will lead the American central bank after Jerome Powell steps aside in May.

"So, a potentially less dovish Fed Chairman pick, a rebound in the dollar and gold giving way to overbought conditions have contributed to the decline in the price of the precious metal," Reuters quoted KCM Chief Trade Analyst Tim Waterer as saying.

"Rumours that Kevin Warsh will replace Jerome Powell as Fed Chair has weighed on gold during Asian trade," said Matt Simpson, a senior analyst at StoneX, as quoted by the report.

Silver ETFs crash:

Silver ETFs mirrored that sharp decline in the industrial metal. Axis Silver ETF crashed 24 percent, while ICICI Prudential Silver and Kotak Silver ETF fell nearly 23 percent. SBI Silver ETF and others fell more than 22 percent each.

Mirae Asset Silver ETF, Motilal Oswal Silver ETF, HDFC Silver ETF and Nippon India Silver ETF also plunged sharply.

Hindustan Zinc share price:

Hindustan Zinc is the largest producer of silver in India, and produces refined silver with a minimum 99.9 percent purity. Hence, the fall in the precious metals pushed the stock down.

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