After a slow start to the year, the Nifty Metal index has surged to the second spot, delivering nearly 24% returns in 2025, close on the heels of the Nifty PSU Bank, which has gained about 26%.
The difference becomes stark at the stock level. About 93% of metal stocks (14 out of 15) have generated positive returns, compared with 67% of PSU bank stocks (8 out of 12). Moreover, 73% of metal stocks (11) have posted double-digit gains, versus 67% among public-sector lenders.
Notably, Adani Enterprises is the only laggard in the metal index, with a modest 6% decline. In contrast, all four underperformers in the PSU bank index — Punjab & Sind Bank (PSB), Indian Overseas Bank (IOB), UCO Bank and Central Bank of India have suffered steep double-digit losses ranging from 31% to 44%.
Metal’s mettle
Performance across metal stocks over the past year has been largely positive, led by Hindustan Copper which has delivered a sharp 90% return, emerging as the standout performer in the space. The stellar rally follows soaring copper prices, which have kept investors interested in this stock elevated through the year. It has been hitting fresh highs consistently.
Also Read: Copper rally powers up to 76% surge in Hindustan Copper, Hindalco. Buy more or book profit?
Hindalco Industries‘ 40% uptick has piggybacked on copper and aluminium prices. While copper has rallied more than 50% this year, aluminium is up over 20%. National Aluminium Company (NALCO) shares have jumped 41% over a 1-year period.
Among other non-ferrous majors, Hindustan Zinc’s 36% have come on the back of multibagger returns from silver while Vedanta has advanced 31% in the same period.
Steelmakers also participated in the rally, with JSW Steel rising around 20%, alongside healthy gains in Lloyds Metals and NMDC, both up 17%, and SAIL, which climbed 16%.
Performance has been more subdued in other steel names, with Jindal Stainless gaining 8%, Jindal Steel & Power up 7%, and Welspun Corp inching higher by 2%. The overall trend highlights broad-based strength across the metals pack, even as returns vary widely across individual stocks.
But overall, Nifty Metal’s this year returns are its best in past four years.
Bankable public lenders
Public sector banks delivered a mixed but largely positive performance, with Canara Bank leading the pack with a robust 50% gain, reflecting strong earnings momentum and improved asset quality. Indian Bank followed closely, rising 43%, while Bank of India (BoI) advanced 36%. Union Bank of India registered a respectable 27% increase, and heavyweight State Bank of India (SBI) gained 21%, providing stability to the sector.
Punjab National Bank (PNB) and Bank of Baroda (BoB) posted more modest gains of 19% and 17%, respectively, while Bank of Maharashtra underperformed its peers with a 10% rise, highlighting the divergence in performance within PSU banking stocks.
Sector snapshot
Nifty Metal has emerged as the best-performing sector in December, delivering returns of around 5%, while Nifty PSU Bank has declined by nearly 3% over the same period. This sharp divergence in monthly performance has significantly narrowed the lead that PSU banking stocks had built over the metal sector earlier, highlighting a shift in sectoral momentum as the year draws to a close.
Nifty metal’s best returns came in March at 11%, followed by 10% in September and 7% in May. In October, the returns were to the tune of 6%. On six occasions this year, Nifty Metal fell in the red.
Nifty Auto, Nifty India Defence, Nifty Capital Markets and Nifty Bank were other star performers with gains between 20% and 15% while laggards included Nifty Media (-23%), Nifty Realty (-18%) and Nifty IT (-12%).
Metal sector outlook
Market expert Rajesh Bhosale from Angel One expects the metal basket to continue outshining. Within metals, Tata Steel is one stock on his radar.
Market expert Nilesh Jain remains constructive on metals from short-to-medium term perspective, calling the chart structure positive. The Vice President Equity and Head of Research (Technical and Derivatives) at Centrum Broking recommends accumulation in Hindustan Copper and Hindalco.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)