Hindustan Zinc shares fall 2% as silver prices drop 8% after record rally; silver ETFs see outflows

Silver prices fall

• Silver prices dropped 8% after record highs
• Hindustan Zinc shares, silver ETFs plummet as silver prices drop
• Russia-Ukraine peace hopes may have reduced demand for safe-haven assets.

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Silver prices sharply dropped on December 31, after soaring to fresh record highs following a significant bull run. The fall in the precious metal pushed the shares of Hindustan Zinc as well as silver ETFs down sharply.

The shares of the Vedanta Group-company fell to Rs 611.05 apiece in the early trading hours of Wednesday.

Silver prices tumble:

Silver futures with March expiry on the Multi Commodity Exchange of India (MCX) dropped more than 7 percent to Rs 2,32,228 per kilogram. The future contracts with May expiry meanwhile fell around 8 percent to Rs 2,35,512 per kilogram.

The sharp fall may have been driven by profit-booking after the sharp rally. Additionally, hopes for the US-brokered peace deal between Russia and Ukraine reaching a conclusion, which in turn will significantly ease global geopolitical tensions, also may have affected the safe-haven asset.

Hindustan Zinc share price:

Hindustan Zinc shares jumped nearly 27 percent in the past one month, and are up more than 38 percent in 2025 so far. The recent surge in the share price was mostly driven by the sharp rise in silver prices. 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 silver prices today may have impacted Hindustan Zinc’s share price. The stock’s P/E ratio currently stands at around 26, and it has a market capitalisation of more than Rs 2.60 lakh crore.

Silver ETFs:

As a result of the fall in silver prices, silver exchange traded funds (ETF) also declined sharply. Aditya Birla Silver ETF and Axis Silver ETF dropped more than 2 percent each, while Nippon India Silver ETF, Groww Silver ETF, HDFC Silver ETF, Mirae Asset Silver ETF, Kotak Silver ETF and others fell nearly 2 percent each.

Zerodha Silver ETF, ICICI Pru Silver ETF and Edelweiss Silver ETF fell around 1 percent each.

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