Hindustan Zinc and Hindustan Copper shares came under significant pressure on Thursday, January 22, as a sharp decline in silver prices weighed heavily on investor sentiment across metal stocks.

Stock Performance Impact

The metal sector witnessed notable declines with specific stocks bearing the brunt of silver market volatility:

Hindustan Copper has now declined in four of the last five trading sessions, reflecting sustained pressure on the stock.

Silver Market Dynamics

The broader silver market experienced significant volatility with multiple instruments showing steep declines:

Interestingly, the correction in domestic silver-linked instruments occurred despite global spot silver prices not experiencing comparable declines, even as risk-off sentiment had eased overnight.

Leveraged Position Concerns

The sell-off in silver ETFs comes amid concerns over a sharp build-up in leveraged positions over recent weeks. Disclosures from the Margin Trading Facility book, published daily by the National Stock Exchange, reveal that leveraged bets in silver ETFs have increased multi-fold over the past 38 sessions starting December 1.

Zerodha founder and CEO Nithin Kamath highlighted risks associated with the rapid growth of margin trading. In a post on social media platform X, Kamath noted that the Margin Trading Facility has expanded nearly five-fold since the Covid-19 pandemic.

Market Risk Assessment

Kamath warned about liquidity risks during market corrections, cautioning that while liquidity remains ample during market rallies, it dries up quickly during drawdowns, raising the risk of forced selling. He expressed concerns that the next major market correction could trigger synchronized liquidations of leveraged positions, potentially exacerbating volatility.

"We haven't seen a 2008, 2015, or COVID-type event since MTF scaled up. When we do, it will cause mayhem—not because any broker fails, but because forced selling into illiquid markets will cascade," Kamath wrote on X.

Global Context

Risk appetite saw a modest recovery after US President Donald Trump clarified his position on certain policy measures. Trump stated he would not use force to acquire Greenland and clarified that the proposed 10% tariffs on European allies over the issue would not be implemented from February 1, helping ease some risk-off sentiment overnight.

Hindustan Zinc has announced a significant board-level appointment with Mr. Sandeep Vasant Kadam being named as the new Part-Time Official Director. This strategic leadership change will take effect from January 19, 2026, marking an important transition in the company's directorial structure.

Leadership Transition Details

The appointment involves Mr. Kadam assuming the Part-Time Official Director position currently held by Mr. Dinesh Mahur. The transition is scheduled for January 19, 2026, providing adequate time for a smooth handover of responsibilities.

Board Governance Framework

This appointment reflects Hindustan Zinc's commitment to maintaining robust board governance and ensuring continuity in its directorial oversight. Part-Time Official Directors play a crucial role in providing strategic guidance while maintaining operational independence.

The planned nature of this transition, with the effective date set well in advance, demonstrates the company's structured approach to board succession planning and governance continuity.