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India Base Metals: Most down on prospect of steeper rate hike

Informist, Friday, Apr 22, 2022


By Sandeep Sinha


MUMBAI – The futures of most base metals on the Multi Commodity Exchange of India and London Metal Exchange traded in the red due to a broader selloff across asset classes after Federal Reserve Chief Jerome Powell hinted at a 50-basis-point hike in the interest rate at the upcoming meet to fight elevated inflation. 


* Speaking at the International Monetary Fund event on Thursday Powell said, “We anticipate that ongoing rate increases will be appropriate to reach our objectives and expect to begin reducing the size of our balance sheet at an upcoming meeting.” He added that it is appropriate to move more aggressively by raising the rates by more than 25 basis points on a couple of occasions to bring price stability.


* Also weighing down the sentiment is the strength in the dollar index which made the dollar-denominated industrial metals more expensive for other currency holders.


* Market players will wait for the release of manufacturing purchasing managers’ index numbers from the US, European Union and the UK for further cues. 


ALUMINIUM prices fell on the unwinding of long positions by traders on the MCX. China Association of Automobile Manufacturers reported that passenger vehicle sales last month were below expectations due to higher raw material prices, chip shortages and COVID-19. 


COPPER prices slipped as the inventory at the LME rose by 7,275 tn and weaker demand from top consumer China due to rising coronavirus cases and a slowdown in industrial production.


LEAD prices fell on muted downstream demand from battery manufacturers. Profit booking by traders on the domestic bourse also weighed on sentiment.


ZINC price rose on tight supply due to lower production owing to higher energy prices in Europe amid firm demand. The sentiment was further boosted by a fall in LME inventory by 2,875 tn.


* At 1710 IST, on the MCX, the April futures contract of:

 –Aluminium was at 268.80 rupees, down 1%

 –Copper was at 816.05 rupees a kg, down 0.5% 

 –Lead was at 186.45 rupees a kg, down 1%

 —NICKEL was at 2,530.0 rupees a kg, up 0.5%

 –Zinc was at 375.70 rupees a kg, up 0.6%


* Outlook for the evening session on the MCX:

 –Aluminium contract seen at 266.0-271.0 rupees per kg

 –Copper seen at 810.0-822.0 rupees per kg

 –Lead seen at 184.0-189.0 rupees per kg

 –Nickel seen at 2,500.0-2,570.0 rupees per kg

 –Zinc seen at 374.0–379.0 rupees per kg



US$1 = 76.48 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Sushmita Mukherjee



Cogencis news is now Informist. 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.


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Source: Cogencis

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