Heard on the street: Novelis earnings lift Hindalco shares

Shares of Hindalco Industries were the biggest Sensex gainer on Friday after the company's US arm Novelis posted a turnaround in its fourth quarter earnings.

The stock rose 5.8% to 197.50. But investors are not willing to bet on the stock in the long term. Investors are turning cautious on commodities, including metals, as the Fed's second bond buyback programme comes to an end in June.

With global liquidity expected to dry up post QE2, analysts expect fund flow into global commodities to recede.

China's policy rate tightening measures to cool inflation and demand will also impact metal prices. Analysts don't rule out a sharp correction in metals, mainly aluminium.

Aluminium constituted 32% of Hindalco's operating profit in 2011-12.

Contributed by Nishanth Vasudevan