Hindustan Copper Tanks 18%, Wipes Out ₹18,000 Crore

Introduction

Shares of state-owned Hindustan Copper Ltd experienced a steep decline for the second consecutive day, falling by as much as 18% during the trading session on February 1, 2026. The sharp correction led to an erosion of nearly ₹18,000 crore in the company's market capitalisation over just two days. This downturn was part of a broader sell-off in the metal sector, triggered by a severe correction in global commodity markets, particularly in precious metals.

Global Commodity Market Turmoil

The pressure on Hindustan Copper's stock was not an isolated event. The entire Indian metals sector faced significant headwinds, with the Nifty Metal Index emerging as one of the worst-performing sectoral indices, declining by over 4%. The rout was directly linked to an overnight collapse in global commodity prices. Gold and silver prices tumbled, with both metals opening with losses of around 6% on the Multi Commodity Exchange (MCX) and extending their decline to nearly 9% as the session progressed. The global spot market witnessed an even more dramatic fall on the preceding Friday, where silver prices plunged by as much as 37% intraday, and gold fell 12%. This marked gold's most significant single-session drop since the early 1980s and the steepest decline ever recorded for silver.

Margin Hikes Add to the Pressure

Adding to the negative sentiment, the Chicago Mercantile Exchange (CME), a major financial derivatives exchange, increased the margin requirements for copper trades by 20% on January 30. This decision came after copper prices in global markets had reached a record high. The initial margin per contract was raised from $11,000 to $13,200, while the maintenance margin was increased from $10,000 to $12,000. Higher margins make it more expensive for traders to hold futures positions, often leading to a reduction in speculative buying and a cooling of prices. The CME had also previously revised margins higher for silver, platinum, and palladium futures, signaling a broader move to curb volatility in the commodities space.

Reversal After a Strong Rally

The recent correction in Hindustan Copper's stock price comes after a period of exceptional performance. The stock had surged by 133% in just two months, adding approximately ₹41,850 crore to its market value. Over the past year, the stock delivered returns of over 198%, and its five-year return stood at an impressive 1040%. This massive rally was fueled by rising global copper demand, positive company-specific developments, such as its emergence as the preferred bidder for a new copper mining block in Madhya Pradesh, and a strong technical breakout on the charts. The sharp run-up made the stock susceptible to profit-booking, which was eventually triggered by the global market downturn.

Key Stock Performance Data

Analyst Commentary and Outlook

Market analysts suggest that the sharp fall was a result of profit-booking amid heightened global volatility. Kranthi Bathini, Director of Equity Strategy at Wealthmills Securities, noted that some profit-booking was anticipated after the stock's multibagger returns. He advised long-term investors to hold their positions with a trailing stop loss, while short-term traders could consider booking some profits. Mahesh M. Ojha, Vice President of Research & Business Development at Kantilal Chhaganlal Securities, echoed the cautious sentiment, advising against fresh entries at current levels. He pointed out that the recent rally was primarily driven by global factors, which warrants caution.

Forward-Looking Statements

Investors are now looking ahead to the company's board meeting scheduled for February 5, 2026. The board is set to consider and approve the unaudited financial results for the quarter ended December 31, 2025. A decision on the declaration of an interim dividend for the financial year 2025-26 will also be considered. The outcome of this meeting and the company's financial performance will be crucial in determining the stock's future trajectory.

Conclusion

The significant drop in Hindustan Copper's share price is a clear example of how global macroeconomic factors can impact even strongly performing stocks. The correction was triggered by a combination of a severe global commodity sell-off and regulatory margin hikes after a period of unprecedented gains. While the long-term fundamentals for copper remain supported by demand from green energy and electric vehicles, the short-term outlook remains cautious. Investors will be closely watching the company's upcoming quarterly results for further guidance.