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India Base Metals: All down on risk aversion, hawkish Fed stance

Informist, Thursday, Jun 16, 2022


By Sandeep Sinha


MUMBAI – All base metal futures on the Multi Commodity Exchange of India and London Metal Exchange traded in negative territory due to increased risk aversion amid a broad-based sell-off across assets class after the US Federal Reserve raised the interest rate to combat inflation.


* The Federal Open Market Committee increased interest rates by 75 basis points to 1.50-1.75% at its policy meeting on Wednesday, while hinting at another hike of 50-75 basis points at its July meeting.


* The market sentiment weakened as investors assessed the hawkish comment of Federal Reserve Chairman Jerome Powell about aggressive tightening at the upcoming meeting.


* In a surprise move the Swiss National Bank raised rates by 50 basis points to -0.25% to counter inflationary pressure.


* Global ALUMINIUM and ZINC markets saw a surplus in Jan-Apr of 400,000 tn and 76,600 tn, respectively, according to the World Bureau of Metal Statistics’ latest report.


* However, the persistent fall in LME inventory and a decline in the dollar against a basket of major currencies cushioned a further slide in non-ferrous metals. A weaker greenback makes dollar-denominated industrial metals cheaper for other currency holders.


* Investors look forward to the Bank of England’s interest rate decision later today and the Bank of Japan’s policy decision on Friday for further cues.


* The price of aluminium was down on worries of a slowdown in global economic activity and traders raising short positions on the MCX.  


COPPER contract fell on profit booking as market sentiment turned weak and the trend turned negative as the price fell below the key moving averages. The momentum indicator Relative Strength Index was at 35.65, suggesting further weakness in the price.


* At 1640 IST, on the MCX, the June futures contract of:

 –Aluminium was at 216.20 rupees, down 2.7%

 –Copper was at 746.15 rupees a kg, down 1.2% 

 —LEAD was at 182.15 rupees a kg, down 0.3%

 —ZINC was at 311.90 rupees a kg, down 1.7%


* Outlook for the evening session on MCX:

 –Aluminium contract seen at 214.0-220.0 rupees per kg

 –Copper seen at 735.0-755.0 rupees per kg

 –Lead seen at 179.0-184.0 rupees per kg

 –Zinc seen at 308.0–314.0 rupees per kg



US$1 = 78.07 rupees

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


Edited by Michael Correya



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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