Sun Feb 01 07:10:00 UTC 2026: ### Metal Stocks Plunge as Commodity Prices Crash Following US Federal Reserve Chair Nomination

The Story: Shares of metal companies experienced a sharp decline on Sunday, February 1, 2026, with the NIFTY Metal index plummeting as much as 5.15%. This downturn was triggered by a significant crash in global commodity prices, specifically silver, following the nomination of Kevin Warsh as the next US Federal Reserve Chair. Investors fear that Warsh’s hawkish stance will lead to tighter monetary conditions, strengthening the dollar and making commodities less attractive.

Key Points:

  • The NIFTY Metal index fell 5.15% to an intraday low of 11,218 on February 1, 2026.
  • Hindustan Copper led the decline with a near 15% slide, with other major companies like Hindustan Zinc, Vedanta, and Tata Steel also experiencing significant losses.
  • Gold futures dropped 6% to ₹1,40,674 per 10 grams, while silver futures tumbled 6% to ₹2,74,410 per kilogram.
  • Copper and aluminum futures also saw substantial declines of 9% and 4.6%, respectively.
  • Global silver prices crashed over 30% in a single session on Friday, contributing to the negative sentiment.
  • Analysts attribute the decline to profit-taking and the perception that Kevin Warsh‘s nomination signals tighter monetary policy.

Critical Analysis:

The decline in metal stocks appears directly correlated to the market’s reaction to the impending change in US Federal Reserve leadership. The historical context shows that Vedanta, a significant player, had recent quarterly profit increases due to strong base metal prices but also declining sales year-on-year. The market’s sensitivity to external factors like US monetary policy underscores the interconnectedness of global commodity markets. The nomination of Warsh, perceived as favoring inflation control, quickly translated into a stronger dollar, triggering the sell-off in metals.

Key Takeaways:

  • US Federal Reserve policy decisions significantly impact global commodity markets.
  • Commodity prices are highly sensitive to changes in interest rate expectations.
  • Profit-taking after significant rallies can exacerbate market downturns.
  • Investor sentiment plays a crucial role in driving market trends, particularly in the volatile commodity sector.
  • The interconnectedness of global markets means local stock performances are now subject to external factors more than ever.

Impact Analysis:

This commodity market correction could have lasting implications for metal companies and investors. A sustained period of higher interest rates could depress demand for metals, impacting profitability. Companies with high debt levels, like Vedanta, might face increased financial strain. Investors should closely monitor US monetary policy and its potential ripple effects on the commodity sector, reassessing their portfolios accordingly. The events highlight the need for diversification and caution in a volatile global financial landscape.

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