Metals In A Bull Cycle, To Grow 5-8% In The Near-Term: Analyst

Despite a mixed day for the benchmark indices, the metal index closed 3.88% higher. The index could continue to see an upward trend for the next three to four months, according to Kunal Shah, senior technical and derivative analyst at LKP Securities Ltd.

"Metals are in a bull cycle, and I believe this will continue for the next 3–4 months as well." We are extremely bullish on the entire space as well and the entire metal index is likely to go up even from the current levels, up by at least 5–8% on the upside in the near term. Also, if I talk about the index moving 5-8%, I can see a rally of 10-15% from the current levels as well," Shah told NDTV Profit.

The reaction in the metal index was due to the pledge by China to buy unsold household inventory, said Gurmeet Chadha, managing partner and chief investing officer of Complete Circle. Metals are directly linked to China, according to him. However, he asked investors to hold tactical positions as the moves in the metal index are sharp on both sides.

The NSE Nifty 50 closed 27.05 points, or 0.12%, higher at 22,529.05, and the S&P BSE Sensex ended 52.62 points, or 0.071%, lower at 73,953.31. The NSE Nifty Metal and S&P BSE Metal indexes were the top-performing sectoral indices on Tuesday.

The auto index had a subdued day but closed in the green.

Chadha said that two-wheelers have crossed the 2019 volume, with the rural regions showing some signs of recovery.

Shah was also bullish on the auto sector and said that while you need to be selective for the four-wheeler segment, all the companies in the two-wheeler segment are looking good.

"Auto, in my view, is slightly expensive at this point," Chadha said.

Shah was also positive on selective PSU bank stocks. He was bullish on the State Bank of India and Maharashtra Bank. The index will hit a new high as the upward trend continues, according to him.

Chadha concurred and said SBI is a "turnaround story" with the growth in net interest income. Even the subsidiaries have seen a turnaround, he said.

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