Cautious on metal stocks: IV Subramaniam

In a chat with ET Now, IV Subramaniam, MD & CIO, Quantum Advisors, Director, Quantum AMC, shares his views on metals.

ET Now: With all the hum and drum about China and the impact China will have on metals as a group, metals stocks have managed to bounce back be it Hindalco or a Tata Steel from the recent low are you a bit surprised from a, are you a bit surprised with the recent price action in metals or do you think currently metals as a group there is pure momentum and the fundamental logic is not there?

IV Subramaniam: Yes, the fundamental logic is still bit sketchy but with the kind of money which came into India from FIIs over the last few months, it did not surprise me to see all kinds of stocks moving up. In the case of metals as you have rightly said the global scenario still looks bleak and therefore the pricing environment may turn negative for some of the metals stocks. But the money which came into India was put into action into all kinds of stocks including the metal stocks. Some of the metal stocks of course had certain issues which also impacted them significantly last year and those seem to have been at least partly resolved. That might have been one reason why you saw some bounce back but otherwise since fundamental still look weak I would be very cautious on many of these stocks.