Metals emerged as the weakest-performing sector in Wednesday's early trade, with stocks such as Vedanta Ltd, Hindalco Industries Ltd, National Aluminium Company Ltd (Nalco), Hindustan Zinc Ltd (HZL), Tata Steel Ltd and Hindustan Copper Ltd extending losses amid a drop in global metal prices and profit booking.

At last check, Hindustan Copper was down 2.72 per cent, while Nalco slipped 1.77 per cent. Tata Steel and Hindustan Zinc fell 1.37 per cent and 1.36 per cent, respectively. Vedanta Ltd, Jindal Steel Ltd and Lloyds Metals & Energy Ltd shed 0.71 per cent, 0.78 per cent and 0.31 per cent in that order.

For steelmakers, Nomura noted that global steel prices remained largely range-bound last week, while India witnessed a mild correction in flat steel prices alongside another steep decline in long products.

"We maintain our positive outlook on the Indian steel sector, and believe global factors, especially China, should have a limited impact on the earnings potential of major steel players. Our positive stance on the Indian steel sector is underpinned by improving domestic price momentum despite global headwinds," Nomura said.

The brokerage maintained its 'Buy' recommendation on Tata Steel, JSW Steel, Jindal Steel and Lloyds Metals.

For copper, HDFC Securities said, "Copper is increasingly decoupling from traditional economic indicators like Oil / Steel, marking a significant shift in its market behaviour. While these commodities once moved in tandem due to their shared reliance on the global business cycle, Copper is now being propelled by unique structural drivers, specifically the energy transition and high-tech infrastructure."

The brokerage further said, "The sharp spike in sulfuric acid prices is creating a supply-side bottleneck that places significant upward pressure on Copper prices. It is a critical input required to extract Copper and accounts for roughly 20 per cent of Global Copper production, and the surging cost of acid has dramatically increased the break-even points for miners, particularly in Chile and Africa. This logistical constraint influences the marginal cost of production, shifting the baseline cost curves for global mine operations."

In the case of aluminium, rising Chinese exports and near-record-high domestic production weighed on aluminium prices, Kotak Institutional Equities said.