Whalesbook
Market Indices Face Pressure Amid Commodity Price Volatility
Shares of Hindustan Zinc and Hindustan Copper experienced declines on Thursday, January 22, 2026. Hindustan Zinc's stock saw a decrease of approximately 3-4%, while Hindustan Copper's shares dropped around 4% from their day's highs. This downward movement in the metals and mining sector was largely attributed to a notable fall in silver prices. Silver futures on the MCX experienced a decline of over 2%, leading to significant reductions in silver-linked exchange-traded funds (ETFs), which saw losses ranging from 10-14%.
Growing Concerns Over Market Leverage and Margin Trading
The volatility in silver ETFs is occurring against a backdrop of increased leveraged positions. Data from the National Stock Exchange's Margin Trading Facility (MTF) book indicates a substantial build-up, with leveraged bets in silver ETFs reportedly increasing multi-fold over the 38 trading sessions since December 1. This trend has drawn attention from market participants, including Zerodha founder and CEO Nithin Kamath, who has previously highlighted the rapid expansion of MTF. Kamath cautioned that the MTF has grown nearly five-fold over recent years, reaching over ₹1.10 lakh crore. He expressed concerns that a significant market downturn could trigger synchronized liquidations of leveraged positions, potentially leading to widespread price disruptions due to reduced liquidity in less liquid markets.
Global Sentiment Eases, But Domestic Commodity Markets React
The broader market sentiment saw some recovery globally following statements from U.S. President Donald Trump regarding Greenland and a clarification that proposed tariffs on European allies would not be implemented as initially planned. This easing of geopolitical tensions contributed to a firmer U.S. dollar, which typically exerts downward pressure on commodities. However, domestic commodity markets, particularly silver and its related instruments, reacted sharply to the increased leverage and price corrections.
Mixed Financial Performance from Key Players
In terms of financial results, Hindustan Zinc reported a robust performance for the third quarter of FY26. The company announced a consolidated net profit of ₹3,916 crore, marking a significant increase of 46% year-on-year, and revenue growth of 27.47% to ₹10,980 crore. The company attributed this strong showing to higher production, increased zinc and silver prices, lower production costs, and improved by-product realisations. Its silver revenue saw a substantial 83% year-on-year jump to ₹2,676 crore.
Conversely, Hindustan Copper's financial update for Q3 FY26 indicated a sequential decline. The company reported an operating profit of ₹69.97 crore, a decrease of 32.86% quarter-on-quarter, and a profit after tax of ₹62.90 crore, down 38.13% from the previous quarter. Total income also fell by 36.75% sequentially to ₹327.77 crore.
Current Market Valuation
As of January 22, 2026, Hindustan Zinc is trading with a Price-to-Earnings (P/E) ratio of approximately 24.5x, and its market capitalization stands around ₹2.86 lakh crore. Hindustan Copper, on the other hand, has a significantly higher P/E ratio of around 94.10x, with a market capitalization of approximately ₹53,887 crore.