From Hindustan Times: 2024-04-10 19:32:19

Chinese investors are boosting stocks tied to metals like copper and gold, driving a 10% increase in a gauge tracking resource firms in Shanghai and Shenzhen. Demand for base metals is spurred by China’s industrial sector recovery and global interest rate expectations. Meanwhile, gold remains popular for its yield amid property market concerns.

Analysts predict bullish views on copper prices and stocks like Zijin Mining amid supply tightness. Aluminum producers are expected to enjoy high margins due to tight supply conditions. The sector’s stock rally aligns with a commodities bull run, lifting gold to new highs and benefiting Chinese equities.

State-run, old-economy stocks in China’s CSI 300 index have risen slightly this year, while Hong Kong-listed Chinese firms, including tech companies, have seen a 4.3% increase. However, concerns about a potential bubble in metal stocks arise, with some attributing recent gains to speculative hot money seeking quick returns.

Despite the stock rally, uncertainty lingers over China’s economic recovery, with some questioning its strength. The recent gains in metal stocks may be fueled by speculative motives rather than solid economic fundamentals. Observers warn of the risks associated with relying on hot money for investment decisions in the market.



Read more at Hindustan Times: Chinese Investors Snap Up Copper, Gold Stocks to Drive 10% Gains