Morgan Stanley said these commodity stocks could rise sharply as China takes steps to boost its struggling property sector and economy. The investment firm's choice comes after China's central bank laid out plans to support the lagging property market and said it would sharply cut bank reserves needed as the second-largest economy faces weak demand and slowing growth. amount of cash. The Morgan Stanley team believes that these measures show a high “sense of urgency” and indicate that China is “taking deflation seriously.” “While our China real estate analyst Stephen Cheung would like to see more details on the policy and its implementation to assess the potential fundamental impact, he believes the possible measures could boost home sales and ease housing price declines in the short term. fell. Against this backdrop, the firm sees good prospects for metals and mining stocks, which have lagged the S&P 500 by 25 percentage points since May, as more policy action sets in. The industry could also get another boost. “We like M&M stock with near-term catalysts amid heightened macro uncertainty and/or given ongoing supply challenges for copper,” he said. Here are some companies that could benefit from China's stimulus package: In the mining sector, Morgan Stanley ranks Freeport-McMoRan and Alcoa as its top picks, with shares of both companies up about 22% this year. and 17%. It also highlighted U.S.-listed Vale shares as a potential winner, citing the renewal of the Freeport Grasberg mine in Indonesia as one of the potential catalysts, with a $58 price target. It could be up more than 20% from Wednesday. Analysts believe that U.S. Steel has been one of the biggest beneficiaries of China's stimulus plan in recent months due to planned sales to Japan. Nippon Steel Corp. made headlines after the deal drew criticism from the Biden administration, which NBC News reported earlier this month planned to block the nearly $15 billion deal.