Based on market analysis from February 1–2, 2026, the metal sector experienced a significant reversal, shifting from previous highs to sharp declines. This was driven by a combination of profit-booking after a strong rally, a strengthening US dollar, and negative sentiment surrounding the Indian federal budget. 

Key Trends and Analysis:

• Sudden Sharp Correction: After a period of 8.5% gains over three sessions, the Nifty Metal index experienced a sharp 3.3% decline. Precious metals experienced an even more dramatic reversal, with gold and silver dumping heavily—silver falling as much as 12% in a short period—after reaching historic highs.
• Sector Leaders Under Pressure: Major metal stocks witnessed heavy selling pressure, including a 15% plunge in Hindustan Copper, and significant drops in Vedanta and Hindalco.
• Key Drivers of the Reversal:
  • Profit Booking: Investors took profits after a sustained one-month surge in metal stocks, which had previously outperformed the broader market.
  • Stronger US Dollar & Yields: A stronger dollar and rising yields increased the opportunity cost for non-interest-bearing assets like gold, driving the sell-off.
  • Budget & Economic Sentiment: Concerns about the federal budget, persistent foreign outflows, and weak global demand outlooks caused investors to trim exposure.
• Technical Outlook: While some technical indicators suggest a "dark cloud cover" pattern—a sign of a potential short-term top—the medium-to-long-term technical uptrends for many metals are still viewed as intact. 

Impacted Stocks (as of late Jan/early Feb 2026):

• Top Losers: Hindustan Copper, Vedanta, Hindalco, and Hindustan Zinc.
• Individual Stock Action: Technical reversal patterns were noted in stocks like Aditya Ultra Steel and Alkali Metals Limited.