Short-term volatility? Yes, but operating landscape might be changing: 5 metal stocks with upside potential of up to 20%

After the IT sector companies, metal is another sector where the fortunes of Indian companies are more tied to what is happening globally rather than what is happening in India. The reason, global metal prices are decided by two things, first is the state of the Chinese economy and second is how the US dollar behaves in the global markets. On the first, there are initial indications that after close to more than two years, things are turning better. The most reliable indication came last month with better than expected GDP numbers. On the second front, there is still lots of uncertainty thanks to flip-flops by the US Fed on interest rate cuts. Now if one looks at the metal stocks, they have sort of out performed volatile Indian markets. But given the fact that these days, too much money flows into stocks where there is even a slight bit of positive development, the possibility that these stocks may turn volatile if there was more pressure on the broader market. However, when the tide turns, because the operating matrix of the companies would be better if the China recovery continues, there is a high probability of them turning into relative outperformers.