Informist, Friday, May 26, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India and the London Metal Exchange because of improved risk appetite, short-covering, and a retreat in the dollar.
The dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.2% at 103.99 on profit booking. A weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies.
“A short-covering squeeze albeit no structural change to the bearish outlook. Debt ceiling discussions ongoing but expectations of a weekend settlement are picking up,” said Al Munro in a note at broker Marex.
The chatter about an imminent stimulus from China and the long weekend with the LME and US markets shut on Monday also aided the positive sentiment.
Investors will seek further cues from the US personal consumption expenditure data to be released later today.
ALUMINIUM prices rose due to short-covering of positions by traders on the domestic exchange.
COPPER prices gained as investors viewed the recent sell-off as overdone and the dollar weakened. Traders increasing their long positions on the MCX also helped prices.
LEAD contracts rose due to short-covering of positions by market participants on the domestic bourse.
ZINC contracts outperformed other base metals after a sharp fall in the past few sessions. The rumours about a stimulus from China, which may increase metal demand, also supported the positive sentiment.
* At 1705 IST, on the MCX, the May futures contract of:
–Aluminium was at 210.0 rupees a kg, up 1.4%
–Copper was at 705.50 rupees a kg, up 1.6%
–Lead was at 185.55 rupees a kg, up 1.7%
–Zinc was at 209.50 rupees a kg, up 3%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 206.0-212.0 rupees
–Copper seen at 697.0-718.0 rupees
–Lead seen at 181.0-186.0 rupees
–Zinc seen at 204.0–216.0 rupees
End
US$1 = 82.57 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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