Metal stocks from Hindalco to Nalco rally between 3-4% on Wednesday - Here's why

All but three stocks on the Nifty Metal index  - NMDC, Jindal Stainless and Hindustan Copper are trading with gains.

Metal stocks received a boost when the China's industrial production rose 4.6% from a year earlier, which is higher than the consensus forecast of 4.5% growth.

While the economy outperformed expectations in the July-to-September period, recent indicators have pointed to weakening momentum and demand as the final quarter kicked off.

Policymakers are taking steps to add stimulus to help the economy, including via an unconventional mid-year budget revision and the approval of 1 trillion yuan worth of sovereign bonds for infrastructure investment last month.

"We may see Hindalco stock price consolidate for a couple of months because they have indicated that in the next quarter, there would be some shutdowns. However, I think we are likely to see a better second half or the fourth quarter, so one can continue holding the stock as the management has guided for EBITDA per Tonne to be above 500 for the second half on average. So Hindalco looks good at current levels and one can continue to hold," said Shahina Mukadam, market expert.

The Nifty Metal index is yet to turn positive for the year, currently trading 1.1% lower for 2023.