Home Commodity Market News India Base Metals:Down as weak equities, strong dollar hit sentiment

India Base Metals:Down as weak equities, strong dollar hit sentiment

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Informist, Friday, Jun 17, 2022

 

By Sandeep Sinha

 

MUMBAI – Futures of all base metals on the Multi Commodity Exchange of India fell despite positive cues from the London Metal Exchange, as investors shun riskier assets and prefer to sit on cash. Sentiment was dampened by a rally in the dollar index, weakness in equity markets, and a slowdown in top consumer China.

 

* “The heavy losses in stock markets were presumably one of the factors weighing on metals prices, as they reflect the high risk aversion among market participants. It seems that there are growing fears of recession,” Commerzbank AG said in a report. “These are being fuelled primarily by the tightening of monetary policy by many central banks, first and foremost the Federal Reserve.”

 

* Demand for metals is under threat as monetary policy tightening by developed economies threatens to stifle economic development and spark a possible recession, AngelOne said in a note.

 

* The dollar index rose 0.7% to above the 104 mark. A stronger greenback makes dollar-denominated commodities such as base metals expensive for holders of other currencies.

 

* For cues, investors will track Federal Reserve chief Jerome Powell’s speech at a conference later today.

 

* Weakness in the rupee and a persistent decline in inventories at LME-accredited warehouses may cushion base metal prices on the lower side. 

 

ALUMINIUM is trading below its all the major averages on daily charts. The relative strength index is at 26.3, indicating further downside in prices.  

 

COPPER contracts fell due to a firm dollar and concerns about a global economic slowdown.

 

* At 1625 IST, on the MCX, the June futures contract of:

 –Aluminium was at 213.90 rupees, down 0.9%

 –Copper was at 746.80 rupees a kg, down 0.5% 

 —LEAD was at 183.05 rupees a kg, down 0.4%

 —ZINC was at 311.85 rupees a kg, down 1.3%

 

* Outlook for the evening session on MCX:

 –Aluminium contract seen at 211.0-216.0 rupees per kg

 –Copper seen at 738.0-754.0 rupees per kg

 –Lead seen at 181.0-186.0 rupees per kg

 –Zinc seen at 308.0–315.0 rupees per kg

 

End

 

US$1 = 78.07 rupees

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

 

Edited by Avishek Dutta

 

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Source: Cogencis

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