Nifty Metal up 5% in September so far; can metal stocks sustain these gains?

livemint.com:

Nifty Metal index has gained approximately 5 per cent, while the benchmark Nifty has risen by about 2 per cent. With the exception of August, when the metal pack fell by 1.5 per cent, the index has witnessed significant gains since March this year, driven by hopes of a revival in demand both from China and domestically as economic growth picks up. Since September last year, the metal pack ended in the red only four times on a monthly basis.

The Nifty Metal index suffered losses of 4 per cent and 19 per cent in January and February, respectively, this year because of strong losses in shares of Adani Enterprises after the Hindenburg episode. Primarily because of this, the metal index has underperformed the benchmark Nifty this year so far. The Nifty Metal index is up 4 per cent while the Nifty is up 8 per cent year to date (as of September 6 close).

Shares of Adani Enterprises are down about 35 per cent this year so far while Vedanta's share price has declined nearly 22 per cent in the same period. Hindustan Zinc's share price is flat so far this year. Rest all components in the Nifty Metal index are in the green this year, with shares of Jindal Stainless up with a whopping gain of 98 per cent.

Shares of APL Apollo Tubes are up about 64 per cent. There are 10 stocks, out of the total 15, that have risen over 15 per cent this year so far. China is a big factor for metal stocks.

After China ended its pandemic-time restrictions, hopes soared that the world's second-largest economy will see a sharp rebound in economic activities. This gave a boost to metal prices. Additionally, the domestic macro environment is healthy which also supports the demand scenario for metals.