Even large index heavyweights have participated in the move. Tata Steel, for instance, has delivered strong returns over the past 12 months, despite not being directly linked to traditional base metals like copper. The broader Nifty metal space has consistently outpaced the benchmark, reflecting renewed investor interest.
However, market experts caution that the metal rally is far from uniform and needs to be analysed segment by segment.
“Actually, metals are really quite broad and you really need to break up metals into precious metals, some of the base metals, and even within base metals there are different underlying demand drivers for steel, for zinc, for copper, etc.,” said Ashi Anand, Founder & CEO, IME Capital in an interview to ET Now.
According to Anand, precious metals such as gold and silver were among the strongest asset-class performers last year, driven largely by geopolitical uncertainty, central bank diversification away from the dollar, and strong investor appetite.
“What you have seen in the precious metals pack and this gold and silver, where you have seen substantial up moves and were probably the big outperformers in terms of an asset class last year, has really moved up largely on account of geopolitical concerns, and a very large amount of this move does appear to be done,” he said.
While momentum remains strong, Anand said caution is warranted at current levels.“In any very strong bull market, it is always very difficult to call the top of a bull market… very often towards the end of a bull market you still see very strong demand tailwinds. So on gold and silver, we are aware that there is extremely strong momentum, but we are a bit more cautious because you have already seen a very large part of the move,” he added.
The outlook, however, turns more constructive when it comes to certain industrial metals linked to the next wave of technological investment.
“When it comes to metals, we are a little more positive on certain materials that go into electronics and electricals, so things like copper, to some extent aluminium, zinc at some level. What you are seeing is very strong AI capex that is going to come in over the next decade,” Anand noted.
He said artificial intelligence–led capital expenditure is emerging as a structural demand driver for select metals, though supply dynamics remain a key variable.
“Copper has seen very significant mine shutdowns which has led to the very sharp rally that we have seen. As those mines come back, you should see copper settle down a bit,” he said, adding that longer-term AI-driven demand remains supportive.
Steel, however, continues to be an area of caution.
“Steel is something we are a bit more cautious about. It is still very infra- or auto- or consumer goods- or housing-driven. The biggest market, which is China, you are not seeing very strong demand growth drivers coming in from there. Until you do get a lot more positive about the Chinese economy, we have a bit more of a cautious view on the steel pack,” Anand said.
As attention shifts to the earnings season, the IT sector is also coming under the spotlight, especially as artificial intelligence reshapes technology spending globally.
Anand drew a sharp distinction between digital platform companies and traditional IT services firms.
“Let us first differentiate IT very clearly into two very distinct segments. One, you have digital platforms or tech plays which are actually apps or platforms that have been created for the Indian consumer,” he said.
He described Indian digital platforms as a long-term structural theme.
“We believe that this is the theme for the decade. This decade is likely to see sustained value migration away from traditional businesses towards new-age digital tech firms. And as these companies continue to scale, we also see profitability and cash flows improving substantially,” Anand said, calling the combination of growth and profitability “a very, very strong recipe for value creation.”
The outlook for traditional IT services companies, however, depends on a different set of factors.
“IT services are actually quite a different story. These are companies like Infosys and TCS which are servicing global IT demand. In the near term, it is about what is happening in terms of a demand recovery coming in from the US,” he said.
While US tech spending has been weak over the past two years, Anand expects gradual improvement as the economy recovers. Beyond that, AI could emerge as a meaningful growth driver from FY27 onwards.
“As AI becomes a bit more mainstream, we are expecting fairly large enterprise-wide AI projects coming in where larger enterprises are trying to incorporate AI into their overall tech stack. We see Indian IT companies being very well positioned here,” he said.
At the same time, AI is likely to improve operational efficiency, putting pressure on topline growth but supporting margins.
“AI is also going to be used quite substantially by these companies to increase the productivity of their labour force. Because they need to pass on some of these cost benefits to clients, this is likely to have a deflationary impact. You are therefore likely to see revenues possibly not grow as much, but improvement in margins, and therefore profitability should be decent,” Anand said.
As markets weigh sustainability across sectors, both metals and IT appear set for a more nuanced phase—where stock-specific and segment-specific dynamics will matter far more than broad-based rallies.
