Hindustan Zinc Shares Fall 10% as Silver Prices Drop After Record Rally
Hindustan Zinc share price:
Hindustan Zinc is India’s largest silver producer and makes refined silver with at least 99.9 percent purity. As silver prices fell sharply, the stock came under pressure. Shares of the Vedanta Group company dropped to Rs 640.35 during afternoon trade on Friday. The decline followed a steep fall in silver prices during the second trading session of the day.
Silver prices tumble:
Silver prices on COMEX fell more than 8 percent to $104.37 per ounce. This came just a day after the metal touched a fresh lifetime high of $119.51 per ounce.
Silver futures with March expiry on MCX dropped over 9 percent to Rs 3,63,723 per kilogram. This was a day after the contract hit a record high of Rs 4,39,337 per kilogram. Prices have now fallen more than 12 percent from the peak in just one session. Futures with May and July expiries also declined by around 9 percent each.
The sharp fall in global precious metal prices comes amid speculation that the US Federal Reserve could get a more hawkish chair. US President Donald Trump said he plans to announce his choice to replace Fed Chair Jerome Powell on Friday. This has increased market uncertainty ahead of Powell stepping down in May.
“A potentially less dovish Fed Chair pick, a rebound in the dollar, and overbought conditions in gold have all contributed to the fall in precious metal prices,” Reuters quoted KCM Chief Trade Analyst Tim Waterer as saying.
“Rumours that Kevin Warsh may replace Jerome Powell as Fed Chair weighed on gold during Asian trading,” said Matt Simpson, Senior Analyst at StoneX, as quoted in the report.
Silver ETFs crash:
Silver exchange-traded funds also saw heavy losses, reflecting the sharp fall in silver prices. Axis Silver ETF dropped as much as 12 percent by 1.50 pm, while Motilal Oswal Silver ETF fell 11 percent.
Mirae Asset Silver ETF, Kotak Silver ETF, Bandhan Silver ETF, HDFC Silver ETF, Zerodha Silver ETF, ICICI Prudential Silver ETF, and Nippon India Silver ETF were all down more than 10 percent each.
Hindustan Zinc share price:
Hindustan Zinc remains the largest producer of silver in India and produces refined silver with at least 99.9 percent purity. The sharp fall in silver prices has directly impacted the stock.
Despite the recent drop, the stock has gained more than 48 percent over the past six months and around 133 percent over the last five years.
