Indian metal stocks are poised for a favorable phase, supported by multiple positive factors including global demand trends, supply-side constraints, and policy support, according to market expert Siddhartha Khemka from MOSL. Speaking to ET Now, the Head-Retail Research outlined a comprehensive positive view on the metals sector while expressing caution on retail stock Trent.

Metals Sector Shows Broad-Based Strength

Khemka highlighted that both precious and industrial metals are demonstrating strength, though driven by different underlying factors. Precious metals continue to benefit from geopolitical concerns, serving as a risk-off trade amid global uncertainties. Simultaneously, industrial metals including copper, zinc, and aluminum are experiencing rising global growth momentum.

The expert emphasized that supply curtailments in certain regions, combined with improving demand from China, are creating a supportive environment for base metals. This dual impact of constrained supply and strengthening demand is providing a solid foundation for the sector's positive outlook.

Policy Support Enhances Sector Prospects

India's policy measures are playing a crucial role in improving the metals sector's prospects. Khemka specifically noted the impact of safeguard duties, particularly on the steel and ferrous side, which are enhancing both pricing and earnings visibility for calendar year 2026. These protective measures are expected to provide domestic producers with improved market conditions and profitability.

Steel Sector Positioned for Strong Growth

The domestic steel sector appears particularly well-positioned to capitalize on shifting global trade dynamics. Khemka projects significant growth potential with the following outlook:

The expert believes India's steel market will benefit substantially from changing global trade patterns, particularly as Chinese exports reach their peak and protectionist measures increase worldwide.

Industrial Metals Expected to Outperform

Excluding precious metals, Khemka anticipates continued upside in industrial metals such as copper, zinc, and aluminum during the current year. He expects this positive momentum to be followed by further gains in ferrous metals, creating a sequential improvement across different metal categories.

Trent Faces Valuation and Growth Concerns

While maintaining a positive metals outlook, Khemka adopted a more cautious stance on retail stock Trent. Despite the company's strong long-term credentials and execution capabilities, several concerns warrant attention:

The expert acknowledged Trent's management strength and business capabilities but highlighted that current macro headwinds, particularly affecting the retail business, may require more time to improve. The high valuation multiples continue to factor in strong growth expectations that may not materialize in the near term.

Investment Strategy Recommendations

For investors considering Trent, Khemka suggested a wait-and-watch approach. He recommended that existing shareholders may continue holding their positions but advised against fresh buying until there is visible improvement in the company's financial numbers. This cautious stance reflects the need for better alignment between valuation expectations and actual business performance in the current challenging retail environment.

Metal stocks significantly outperformed a muted equity market as commodity prices surged to fresh record highs, with leading producers attracting strong buying interest amid a broad-based rally across industrial and precious metals.

Leading Metal Stocks Performance

Several metal stocks delivered impressive gains during the trading session:

Industrial metals started the new year on a strong footing, with tin, zinc, and aluminium all registering notable gains, contributing to the positive sentiment across metal stocks.

Silver Reaches Historic Milestone

Silver emerged as a key driver of market sentiment, soaring past the $90 per ounce mark for the first time in history. The precious metal hit this record high amid heightened geopolitical tensions and supply concerns.

The rally has been underpinned by rising geopolitical risk premium linked to tensions involving Iran and the US capture of Venezuela's President Nicolás Maduro. Uncertainty around potential US tariffs on white metals, with clarity awaited by June, has added to price momentum.

Silver faces significant supply challenges, entering its sixth consecutive year of supply deficit. The sharp price rise has pushed silver's market capitalisation beyond $5 trillion, placing it among the world's largest assets by value, compared to gold's $32.17 trillion market cap.

Copper Scales New Heights

Copper extended its rally to fresh record highs, moving above $13,000 per tonne on strong demand linked to the artificial intelligence boom. The metal's growing use in data centres and electronics has emerged as a key demand trigger.

Beijing's metal markets have been gripped by speculative activity, with trading values in Shanghai jumping more than 260% from a year earlier. This speculative frenzy has contributed to gains across multiple metals, including nickel, zinc, and aluminium.

Market Impact and Outlook

The sharp rally across metals has directly benefited listed producers, with major companies emerging as clear winners as investors position for continued strength in commodity prices. While benchmark indices remained range-bound, the metals sector attracted significant buying interest, supported by the combination of supply constraints, geopolitical tensions, and strong industrial demand driven by technological advancement.