JPM sees metal prices and equities recovery in Q1

JPMorgan upgrades European mining and metals sector to "overweight" from "underweight," expecting recovery for metal prices and equities in late Q1, as Chinese economic stimulus expands

JPM says metal equities are underperforming metal prices by about 5% year-to-date, due mainly to the possibility of U.S. import tariffs that has drawn inventories to the U.S. and tightened Chinese physical metal markets

The broker adds another broad reason is China's pivot to looser economic policy in September, together with new fiscal stimulus measures announced this month

JPM sees 10-20% EBITDA upgrades for mining and metals equities, the largest being for precious metals miners

The broker recommends adding exposure to miners with exposure to copper, aluminium, gold, and/or corporates that are strategically vulnerable

JPM says its key picks are Rio Tinto RIO.L, Lundin Mining LUN.TO, and Antofagasta ANTO.L for copper, Fresnillo FRES.L, AngloGold, and Hochschild Mining HOCM.L for gold, Norsk Hydro NHY.OL for aluminium, and SSAB SSABa.ST for European steel (all rated "overweight")