Hindustan Zinc shares drop 5% amid slump in global silver prices

Shares of Hindustan Zinc, a Vedanta Group company, dropped 5% in Tuesday's trade, June 23, falling to an intraday low of ₹544 apiece, as a sharp decline in global silver prices weighed on investor sentiment.

Spot silver prices slumped 5% to $61.90 per ounce, hitting their lowest level since June 11. In the domestic market, near-month silver futures plunged by ₹2.25 lakh per kilogram. Silver prices were last seen around these levels in late March.

With today's decline, silver's month-to-date losses widened to 15%, erasing all the gains recorded in May. From its record high of ₹4,57,328 per kg, the metal has now fallen by nearly ₹2.30 lakh, or about 50%.

Hindustan Zinc's shares are particularly sensitive to fluctuations in silver prices, given the metal's significant contribution to the company's revenue and profitability. Precious metals have witnessed heightened volatility since the outbreak of the conflict in the Middle East, as rising energy prices strengthened expectations of higher interest rates.

US Federal Reserve officials, in their recent meeting, signalled that a rate hike in 2026 may be warranted if inflationary pressures persist, particularly those linked to elevated energy costs.

Although crude oil prices have retreated to pre-conflict levels amid hopes of a long-term peace deal in West Asia, concerns remain that the inflationary impact of recent disruptions could keep rate-hike expectations alive.

Traders now see an 88% probability of a rate hike in December, up from 61% before the Fed meeting last week, according to the CME FedWatch Tool, as investors price in a more hawkish monetary policy stance under new Chair Kevin Warsh, Reuters reported.

Chicago Fed President Austan Goolsbee said that with the labour market remaining stable, policymakers are focused on determining whether inflation will remain elevated or gradually ease as the effects of tariffs fade and tensions in the Middle East subside.

Investors are now awaiting the US Personal Consumption Expenditures (PCE) data, the Federal Reserve's preferred inflation gauge, due on Thursday for further cues on the future path of monetary policy.

The company's shares have remained under pressure throughout June, losing 14% of their value so far amid multiple negative developments. Earlier this month, Vedanta confirmed that officials from the Enforcement Directorate (ED) had visited some of its offices as part of a FEMA-related investigation.

Further, media reports suggested that the government is considering selling up to a 2% stake in Hindustan Zinc. The government had previously divested a 1.6% stake in the company in November, raising around ₹3,500 crore. The shares in that transaction were sold at ₹505 apiece.

The central government owned nearly 28% of Hindustan Zinc, India's largest silver producer, as of March 31, 2026, according to the company's latest shareholding pattern. Vedanta, the company's promoter, held close to a 61% stake during the same period.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.

Ksheera Sagar has been working as a Market Research Analyst at LiveMint for the past four years, covering stocks, commodities, and broader financial markets. In this role, he closely tracks daily market movements, corporate earnings, sector trends, and macroeconomic developments. <br><br> He has over a decade of experience in the financial services industry and has previously worked with multiple organisations, including global investment bank J.P. Morgan, bringing strong research experience into the newsroom. <br><br> During his career, he has gained extensive exposure to equity research, market analysis, and financial data interpretation, strengthening his expertise across asset classes and market cycles. <br><br> He is known for his data-driven analysis and crisp, listicle-style market stories that break down complex financial developments across key markets for a wide audience. His strong research skills enable him to write detailed and insightful stories on stocks and sectors, focusing on the underlying factors driving market movements. <br><br> His work combines quantitative insights with clear storytelling, presenting financial developments in a clear and structured manner. Moreover, he enjoys writing multibagger and listicle-style copies. Outside of work, Ksheera enjoys playing the piano and exploring new places. He has a keen interest in travel, music, and continuously learning about global markets and economic trends.

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