Shares of Hindustan Zinc declined sharply on Friday, January 30, tracking a steep correction in silver prices across domestic and global markets. The stock was trading at Rs 672.85, down 5.92%, as selling pressure intensified in metal-linked stocks following a sharp pullback in precious metals.
The primary trigger behind the fall in Hindustan Zinc shares is the sharp crash in silver prices. Silver futures on the Multi Commodity Exchange dropped over 5% to around Rs 3.78 lakh per kg, extending the correction from record highs seen earlier this week. Globally, silver prices also retreated nearly 4%, as investors booked profits after an exceptional rally.
Hindustan Zinc has meaningful exposure to silver, which contributes significantly to its revenue and profitability. As silver prices cooled sharply, market participants moved quickly to reassess earnings expectations for silver-producing companies, leading to heavy selling pressure in the stock.
The broader correction was driven by aggressive profit booking after silver surged more than 50% in January, marking its strongest monthly performance on record. The near-vertical rise had left prices stretched, prompting traders to lock in gains across futures and equity markets.
Adding to the pressure was a rebound in the US dollar, which typically weighs on precious metals by making them more expensive for non-dollar buyers. The pullback in global silver prices also led to the compression of India’s premium over international benchmarks, amplifying the downside move in domestic markets.
At the same time, sentiment across the metals complex weakened, with copper, gold, and silver all witnessing sharp intraday corrections. This broader risk-off move in metals further dragged down stocks linked to commodity prices, including Hindustan Zinc.
Overall, the decline in Hindustan Zinc shares reflects the sharp correction in silver prices following an overheated rally, combined with profit booking and global market pressures, rather than any company-specific development.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions.
