Hindustan Copper has witnessed a significant reduction in institutional holding as Life Insurance Corporation of India (LIC) trimmed its stake by 2.014% amid a stellar stock performance. The country's largest insurer reduced its shareholding to 4.072% from 6.086% through strategic market sales executed between August 16 and December 23.

Strategic Divestment Details

The transaction involved the sale of warrants/convertible securities rather than direct equity shares, with LIC disposing of approximately 1.95 crore securities during the four-month period. The gradual approach suggests a systematic profit-booking strategy rather than a single large transaction.

Stellar Stock Performance Drives Profit Booking

The divestment comes amid an exceptional rally in Hindustan Copper shares, which have surged 76% in 2025. The multibagger stock has consistently outperformed the broader metal sector, delivering remarkable returns across multiple time horizons.

Strong Earnings Back Stock Rally

The company's robust financial performance has supported the stock's upward trajectory. Hindustan Copper reported an impressive 85% surge in consolidated net profit for the September quarter, reaching ₹186.02 crores compared to ₹101.67 crores in the corresponding period of the previous year.

Technical Indicators Signal Overbought Conditions

The year-long rally has pushed the stock into strongly overbought territory, with technical indicators showing RSI at 78 and MFI at 87. Values above 70 are typically considered overbought, suggesting potential for consolidation or correction in the near term.

Regulatory Compliance and Market Impact

The disclosure fulfills LIC's obligation under SEBI Regulation 29(2) of the Substantial Acquisition of Shares and Takeovers Regulations, 2011. As a major institutional investor, LIC must report any changes crossing the 5% threshold or involving movements of 2% or more. The extended timeline of sales from August to December suggests a measured approach to minimize market disruption while capitalizing on the stock's strong performance.

Copper prices witnessed a sharp retracement on Wednesday after achieving their longest winning streak since 2017, with the metal experiencing significant volatility following an exceptional rally that positioned it for the largest yearly increase since 2009. The pullback comes after copper surged almost 40% this year, setting multiple all-time highs in its end-of-year rally.

Sharp Intraday Correction Follows Record Rally

On the Multi Commodity Exchange (MCX), copper futures for January 30, 2026 expiry were trading at Rs 1,298.95, down Rs 38.40 or 2.87% intraday. Earlier in the day, prices fell to a low of Rs 1,261.00, marking a 5.7% drop from Tuesday's close and representing a significant correction from recent highs.

Despite this pullback, copper has seen an exceptional run through the year. The metal notched its longest winning streak since 2017, rising for eight consecutive sessions in December and peaking just below $13,000.00 per tonne. On the London Metal Exchange (LME), copper breached the $12,600.00 per tonne mark, with 3M LME copper settling at $12,635.55, reflecting strong performance despite recent volatility.

Supply Disruptions Continue to Drive Market Dynamics

According to Jigar Trivedi, Senior Research Analyst at Reliance Securities, supply concerns have been a key driver of the recent surge. Traders have increasingly moved metal into the US in anticipation of potential tariffs, tightening availability in other regions and creating significant market distortions.

Multiple disruptions in major producing countries such as Indonesia, Chile, and the Democratic Republic of the Congo have weighed on global supply. In November, Mercuria Energy Group flagged the possibility of a severe copper shortage worldwide in 2026, adding to supply-side concerns that have supported the metal's rally.

Technical Levels and Currency Support

Trivedi also pointed to the role of a weaker US dollar, which has made metals cheaper for buyers using other currencies. The dollar has depreciated by approximately 8.00% in the year, lending further support to commodity prices and contributing to copper's strong performance.

As per Manoj Kumar Jain of Prithvifinmart Commodity Research, copper prices are showing high volatility and solid strength, rebounding from previous session sell-offs amid supportive macro factors and demand expectations for 2026. He noted that domestically, the MCX copper January futures contract has support at Rs 1,205.00 to Rs 1,271.00, while resistance is seen between Rs 1,374.00 and Rs 1,410.00.

Market Outlook Amid Perfect Storm Conditions

While copper has cooled off from its recent highs, analysts maintain that the overall market environment continues to be shaped by a "perfect storm" of supply chain stress, an optimistic macroeconomic outlook, and speculative interest, particularly in the context of global industrial recovery and electrification demand.

The outlook for copper remains closely tied to movements in the dollar index, potential policy decisions from the US Federal Reserve, and ongoing geopolitical developments, all of which are expected to influence metal prices in the near term. The combination of structural supply deficits and strong demand from energy transition applications continues to support the long-term bullish outlook despite short-term volatility.