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    A cut in CRR by the Chinese central bank: Will they perform this time? 6 metal stocks for tactical investing

    Synopsis

    Because the metal stocks are highly correlated to Chinese economic growth. Like in the past, whenever the Chinese central bank has taken any step this time also on Wednesday the metal stocks reacted positively. But the question is whether this cut is a reflection that the economic slowdown in China is much worse than what the world has been estimating. If the trouble is deeper than what was perceived then metal stocks might stay as under-performers, but if there is a recovery which would first be reflected in the global commodity prices then it would be an indication that metal stocks may do better in coming months. In both cases it is worthwhile to keep both metal stocks and metal prices on the watchlist.

    While they cannot be called half hearted attempts, the fact is the Chinese government's attempt to revive economic growth through sale of special bonds, allowing selective concession for sectors like real estate, cutting CRR for some category banks did not pay the way the Chinese government had expected. So, finally, the Chinese central bank decided to bite the bullet and once again reduce the CRR for banks which earlier had not got this
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