The shares of Hindustan Zinc jumped more than 3 percent on November 28 as sharp rise in silver prices boosted investor sentiment for the stock. The shares of the company were trading at Rs 489.20 apiece.
The stock has now extended gains for the fourth consecutive session, rising around 8 percent during the period of time. It is currently among the top gainers on the Nifty Metal index.
Silver prices today:
Silver futures on the Multi Commodity Exchange of India (MCX) with December expiry rose nearly 2 percent to Rs 1.65 lakh per kilogram. Silver futures on the exchange with March and May expiries rose more than 1.5 percent each.
Domestic prices of silver also increased, with one kilogram of silver becoming expensive by Rs 3,000 in a day to be priced at Rs 1.76 lakh, according to data on Investorgain. Notably, this sharp rise comes after days of decline.
Why are silver prices rising?
Silver prices are rising on the back of strong industrial demand, supply tightness and expectations of a rate cut by the Federal Reserve. "The price of gold and silver is not primarily driven by corporate profits or economic-growth expectations. Instead, it depends on factors like interest rates, inflation expectation, currency strength/weakness, and supply-demand balance," said Nirpendra Yadav, Senior Commodity Research Analyst at Bonanza.
Inflation concerns, fears of currency debasement, and general macro uncertainty have boosted demand for precious metals even as equities look strong, the analyst said. "For silver specifically, strong industrial demand, supply tightness, and safe-haven demand have helped sustain price strength. Even if stocks and gold both go up together, gold and silver still provide diversification due to their low or unstable correlation with stocks, they can improve a portfolio’s risk- adjusted returns," he added.
"During periods of falling real interest rates or weak economic growth, gold and equities can even move in the same direction. Precious metal still has some space left in it and Nifty has just started the rally, Nifty sustaining above 26300 will triggered interest to buyers, overall moneyness from precious metal is yet not expected to reduce as gold prices have rebounded once again due to the global uncertainty and an increase in the buying of central banks. The traditional negative correlation between equities and bullion may get stronger if key drivers of prices like peace talk between Russia-Ukraine and cease fire in the middle east, amid some progress in the trade deal amongst major economies, improves," Yadav added.
The stock was also lifted by the Rare Earth Magnet scheme recently approved by the Cabinet.
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. The sharp rise in the bullion's prices is expected to further boost the stock.
Hindustan Zinc shares jumped more than 6 percent in the past five days, and around 8 percent in the past six months. The stock is gained around 10 percent in 2025 so far. The shares of the Vedanta Group-company fell around 1.5 percent in the past one year, but have risen around 112 percent in the past five years.
After hitting a 52-week low of Rs 378.15 apiece in March this year, the stock sharply surged around 45 percent in three months to hit a fresh 52-week high of Rs 546.80 apiece in June, on the back of soaring silver prices.
The stock has so far fallen more than 10.5 percent since then. Its P/E ratio currently stands at around 20.
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