Informist, Monday, Oct 16, 2023
By Ishan Rathi
MUMBAI – Futures contracts of most base metals rose today on the Multi Commodity Exchange of India and the London Metal Exchange because of a weaker dollar.
A weak greenback makes dollar-denominated commodities such as non-ferrous metals cheaper for buyers of other currencies, thus increasing their demand.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 106.45.
The fresh liquidity injection of 289 bln yuan (39.5 bln dollars) by the People’s Bank of China, the biggest since 2020, in an effort to boost the ailing economy, also supported the positive movement in base metals prices. The People’s Bank of China today also kept interest rates on one-year medium-term lending facility unchanged at 2.5%.
Market participants will take cues from US Empire State manufacturing index and Federal Reserve Bank of Philadelphia President Patrick Harker’s speech later in the day.
ALUMINIUM prices were marginally higher as traders increased their long positions on the domestic exchange.
COPPER prices rose due to resilient demand in China amid signs of a stabilising economy. “Copper and zinc seem to be lucrative,” said Ajay Kedia, managing director of Kedia Advisory.
He also said that the market movement would be sideways because of expectation of ceasefire in Israel-Hamas war, which could support the base metals.
LEAD contracts traded lower due to a sharp rise in stocks by 5,025 tn at LME-registered warehouses.
ZINC contracts traded higher tracking gains in steel prices and a fall in stocks by 3,325 tn at LME-approved warehouses. The metal is used for galvanisation.
* At 1800 IST, on the MCX, the October futures contract of:
–Aluminium was at 203.15 rupees a kg, up 0.1%
–Copper was at 701.25 rupees a kg, up 0.4%
–Lead was at 184.90 rupees a kg, down 0.4%
–Zinc was at 221.25 rupees a kg, up 0.5%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 202.10-206.50 rupees
–Copper seen at 694.0-706.0 rupees
–Lead seen at 184.60-186.30 rupees
–Zinc seen at 219.0–225.60 rupees
End
US$1 = 83.27 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Maheswaran Parameswaran
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