Informist, Monday, Oct 23, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of most base metals fell today on the Multi Commodity Exchange of India and the London Metal Exchange because of increased risk aversion and broad-based sell-off across assets class.
The sentiment in the non-ferrous was also hurt by concerns about stress in the Chinese property market. The construction sector is one of the biggest users of base metals.
“Base metals prices declined today amid worries about high interest rates, sluggish global growth, and a lack of additional stimulus from top metals consumers China. Also, West Asia unrest added to worries about the demand outlook,” said Saumil Gandhi, senior analyst – commodities, HDFC Securities said in a note.
The key trigger this week will be the Chinese industrial profit numbers and if the numbers are weak it will weigh on prices, said Reliance Securities in a note.
Investors will also keep an eye on key US data, including Jul-Sep GDP, due Thursday, and personal consumption expenditures price index for September, due Friday for further cues.
However, the fall in prices of base metals was restricted by weakness in the dollar, which makes dollar-denominated commodities such as non-ferrous metals cheaper for holders of other currencies.
The dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 106.08.
ALUMINIUM prices fell as the traders rolled-over their bearish positions on the domestic bourse.
COPPER prices fell after International Copper Study Group data showed copper market surplus widened to 33,000 tn in August from 30,000 tn in July.
LEAD contracts traded slightly higher due to short-covering of positions by traders on the MCX.
ZINC contracts traded lower due to concerns about further defaults by Chinese property developers.
* At 1900 IST, on the MCX, the October contract of:
–Aluminium was at 201.80 rupees a kg, down 0.2%
–Copper was at 695.50 rupees a kg, down 0.1%
–Lead was at 186.95 rupees a kg, up 0.1%
–Zinc was at 218.50 rupees a kg, down 0.5%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 200.0-203.50 rupees
–Copper seen at 687.40-707.20 rupees
–Lead seen at 184.30-187.0 rupees
–Zinc seen at 217.10–219.60 rupees
End
US$1 = 83.19 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Maheswaran Parameswaran
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