US Interest Rate Hikes Send Metal Stocks Plummeting

Hindustan Zinc and other metal stocks plummeted nearly 5% on Monday as investors became increasingly wary of interest rate hikes in the US. The Nifty Metal index declined more than 2% amid a broader market sell-off, with Hindalco, Vedanta, and National Aluminium Company (NALCO) falling by around 3-4%. This sharp decline was driven by hawkish comments from US Federal Reserve Chair Kevin Warsh, which strengthened expectations of further interest rate hikes. Spot gold prices also fell to their lowest level in nearly two weeks, with a 0.5% drop in spot silver prices to $66.68. Metal stocks had surged more than 6% so far this month, but the recent divergence in metal prices has now weighed on Hindalco's earnings. Jefferies, an international brokerage firm, remains constructive on precious metals and raised its silver price assumptions to $60-63 per ounce, suggesting there could be further upside to earnings if current spot prices are sustained.