Informist, Wednesday, May 10, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of all base metals fell on the Multi Commodity Exchange of India and the London Metal Exchange because of a rise in the dollar ahead of the US CPI data, due later today.
The dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.1% at 101.72 on increased safe-haven appeal and expectation of hot inflation data. A firm greenback makes dollar-denominated commodities such as non-ferrous metals expensive for holders of other currencies.
“Metals are back under pressure following yesterday’s disappointing Chinese import export data as well as the escalating uncertainty around US debt ceiling discussions,” Al Munro at broker Marex said in a note.
Sentiment was hit as talks between US President Joe Biden and Republican lawmaker Kevin McCarthy on raising US debt ceiling ended without a breakthrough on Tuesday. Metals were also weighed down after European Central Bank President Christine Lagarde said Nikkei Asia inflation remained above comfort zone and the central bank will continue to raise interest rates.
Market players will also look out for China CPI data, to be released on early Thursday. The country is the biggest producer and consumer of base metals.
ALUMINIUM prices fell due to a sharp rise in stocks, by 8,700 tn, at LME-accredited warehouses. China exports of unwrought aluminium and aluminium products fell 22.6% on year in April due to weak global demand, which hurt prices.
COPPER prices declined due to a rise in inventory by 3,700 tn at LME-approved warehouses and on weak demand. “The fear of recession in western countries has diminished the bullish outlook for copper,” ICICI Securities said in a report.
LEAD contracts traded in the red as market participants increased their short positions on the domestic exchange.
ZINC contracts fell as the trend remains bearish due to weak demand and trading below key averages on the daily chart. The momentum oscillator Relative Strength Index was at 37.39, indicating further downside to the price.
* At 1710 IST, on the MCX, the May futures contract of:
–Aluminium was at 207.95 rupees a kg, down 0.8%
–Copper was at 746.40 rupees a kg, down 0.7%
–Lead was at 184.50 rupees a kg, down 0.1%
–Zinc was at 235.55 rupees a kg, down 1.2%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 206.10-210.60 rupees
–Copper seen at 741.60-753.10 rupees
–Lead seen at 184.10-185.10 rupees
–Zinc seen at 233.20–239.90 rupees
End
US$1 = 81.98 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to [email protected]
© Informist Media Pvt. Ltd. 2023. All rights reserved.
Source: Cogencis
