Informist, Wednesday, Jan 31, 2024
By Sandeep Sinha
MUMBAI – Futures contracts of all base metals fell today on the Multi Commodity Exchange of India, tracking those on the London Metal Exchange, because of weak economic data from China and strength in the dollar.
According to data released today by China’s National Bureau of Statistics and China Federation of Logistics & Purchasing, the official manufacturing Purchasing Managers’ Index contracted for the fourth straight month and came to 49.2 in January, up from 49.0 in December. A reading above 50 indicates expansion in economic activity and the number below signals contraction. China is among the top consumers of base metals in the world.
“Factory activity was weighed down by dwindling new orders, which suggests weak demand continues to hamper the economy ahead of the upcoming Lunar New Year holiday,” Kotak Securities said in a note.
The sentiment for the non-ferrous segment was also hit by strength in the dollar ahead of the US Federal Reserve’s interest rate outcome later today. The dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.1% at 103.51. A firm greenback makes commodities priced in the dollar expensive for holders of other currencies.
Investors are also waiting for US Automatic Data Processing non-farm payrolls employment change and Chicago Purchasing Managers’ Index data later in the day for further cues.
ALUMINIUM prices fell as traders increased short positions on the domestic exchange.
COPPER prices slipped because of concerns about demand in China after weak economic data. Traders unwinding their long positions on MCX also hurt prices.
At 1720 IST, on the MCX, the February futures contract of:
–Aluminium was at 204.50 rupees a kg, down 0.3%
–Copper was at 734.45 rupees a kg, down 0.1%
–LEAD was at 183.05 rupees a kg, down 0.3%
–ZINC was at 225.75 rupees a kg, down 0.9%
Outlook for the evening session on the MCX:
–Aluminium contract seen at 204.0-206.20 rupees
–Copper seen at 730.0-738.0 rupees
–Lead seen at 182.90-183.80 rupees
–Zinc seen at 225.0-228.40 rupees
End
US$1 = 83.04 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Aditya Sakorkar
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