Hindustan Zinc shares experienced a significant drop of more than 6% to Rs 588.35 on the NSE, marking the steepest single-day decline in the past six months. The sudden correction in silver prices led to this sharp decrease, impacting investor sentiment in the metal sector following a strong rally last year.
The sell-off was not confined to Hindustan Zinc alone, as the entire metal sector traded in the negative territory during the session. The Nifty Metal index slipped approximately 3.5%, with Hindustan Zinc standing out as the biggest underperformer among its counterparts.
Opening lower at Rs 623, the stock continued its downward trend throughout the day, reaching its lowest level since June 18. Following this decline on Thursday, Hindustan Zinc has now shed about 8.5% in just two trading sessions, erasing its gains from early 2026 and pushing the stock down by nearly 3.4% so far this month.
The company faces a significant challenge due to the weakness in silver prices, as silver plays a crucial role in its earnings. Silver accounted for approximately 41% of Hindustan Zinc’s earnings before interest and taxes in the first half of FY26, compared to around 28% in FY23. A sustained drop in silver prices could directly impact the company’s operational performance.
Silver prices, which had previously driven Hindustan Zinc shares to a robust 38% rally in 2025, have sharply declined recently due to profit booking. Investors are also exercising caution ahead of key US economic data releases that could influence the interest rate outlook of the US Federal Reserve.
In the domestic market, silver futures for March delivery on MCX fell by Rs 10,000 per kilogram on Thursday to an intra-day low of Rs 240,605. This decline followed a 3.17% drop in the previous session, resulting in a total two-day decline of over Rs 18,000 per kilogram.
