Metal Stocks Rally: Nifty Metal Soars 11% on Demand Surge

The Nifty Metal Index has experienced a remarkable surge, climbing nearly 11% in the last month while the benchmark Nifty 50 gained just over 1%. This significant rally, culminating in record highs for both indices on January 2, 2026, is underpinned by several strong factors. Robust demand from sectors like infrastructure, electric vehicles, and data centers is a primary driver, alongside a supportive global economic outlook influenced by improved macro data from China.

Adding to the momentum is a weaker US dollar, which generally boosts commodity prices. Domestically, India's recent imposition of a 12% safeguard duty on steel imports for three years, effective December 30, 2025, is curtailing cheap shipments and providing a significant tailwind for local metal producers. This policy measure aims to protect the domestic industry from oversupply.

Experts anticipate the upward trend in metal stocks to persist. The positive demand-supply dynamics for industrial metals, coupled with psychological support from the stellar performance of precious metals in 2025, suggest continued gains. While Chinese exports could pose a challenge, resilient domestic demand and encouraging auto sector sales are expected to sustain the rally in 2026.