Hindustan Zinc Shares Soar
Hindustan Zinc’s shares witnessed a surge on Wednesday, January 14, during the initial trading hours, rising nearly 3% to reach ₹647.70. This marks the fourth consecutive day of gains for the company’s shares, which have been performing well amidst skyrocketing Silver Prices.
Silver Prices Hit All-Time High
The Commodity Market in India saw silver prices reaching a historic milestone. On the Multi Commodity Exchange of India (MCX), March futures for silver climbed approximately 3%, hitting a new all-time high of ₹2,82,750 per kilogram. Futures for May expiry also rose about 3%, reaching ₹2,88,735 per kilogram, while July expiry contracts surged closer to ₹2,95,200 per kilogram.
Factors Behind the Silver Surge
This remarkable rise in silver prices can be attributed to softer inflation data from the United States. In December, the core consumer price index (CPI) for the U.S. stood at 0.2% month-on-month and 2.6% year-on-year, which was lower than market expectations. This data has fueled optimism that the U.S. Federal Reserve may continue with interest rate cuts. Additionally, discussions by U.S. President Donald Trump regarding low inflation and possible rate cuts have further bolstered market sentiments.
Market analysts have noted that a weaker dollar, potential interest rate cuts, and global geopolitical uncertainties have strengthened the demand for precious metals as a safe investment option.
According to Kainat Chainwala, head of commodity research at Kotak Securities, the gold-silver ratio approaching 54 indicates that silver may outperform gold in the long term.
Direct Benefits for Hindustan Zinc
As the largest silver-producing company in the country, Hindustan Zinc stands to benefit significantly from the rise in silver prices. Over the past five trading days, the company’s shares have climbed nearly 7%, with more than a 13% increase over the past month. In the last six months, Hindustan Zinc shares have surged by approximately 48%.
The current price-to-earnings (P/E) ratio for the company is 25.19, and its market capitalization is around ₹2.72 lakh crore.
Silver ETFs at Record Heights
The rise in silver prices is also reflected in silver-based exchange-traded funds (ETFs), with Groww Silver ETF soaring nearly 5% to a new record high. Other ETFs, including DSP Silver ETF, Tata Silver ETF, Nippon India Silver ETF (SilverBees), Zerodha Silver ETF, and Edelweiss Silver ETF, have seen gains of over 4%. Similarly, UTI Silver ETF, SBI Silver ETF, HDFC Silver ETF, ICICI Prudential Silver ETF, Mirae Asset Silver ETF, Aditya Birla Silver ETF, Motilal Oswal Silver ETF, 360 ONE Silver ETF, and Kotak Silver ETF recorded increases of around 4%, while Axis Silver ETF experienced over a 3% rise.