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Tuesday, October 4, 2022

India Base Metals:Most up tailing LME, weak rupee; BOE decision eyed

Informist, Thursday, Aug 4, 2022


By Sandeep Sinha


MUMBAI – Most base metals futures rose on the Multi Commodity Exchange of India today, taking positive cues from the London Metal Exchange and continued weakness in the rupee against the dollar.


* Rupee settled 0.4% lower against the dollar on a hawkish comment from a Federal Reserve member. A weaker domestic currency makes dollar-denominated commodities expensive for domestic buyers.


* The US Commerce Department data on Wednesday showed new orders for manufactured goods jumped 2% on month in June, after 1.8% in May and above market expectations of a 1.1% rise.


* “Diminishing trade appetite amid growing geopolitical risks and macro uncertainty, as well as the slow summer month of August leave short term forecasts tough to call,” Al Munro at broker Marex said in a note. “Stocks are drawing amid supply uncertainty — but the macro remains overall bearish”, he said.


ZINC prices jumped on soaring power prices and strained supply chain. Traders increasing their long positions on the MCX also supported prices. 


* For further cues, investors look forward to the Bank of England’s rate decision later today. The central bank is widely expected to raise the interest rate by 50 basis points to rein in inflation.


* Market players will also take cues from US initial jobless claims and trade balance data. 


ALUMINIUM prices rose due to short covering of positions by traders on the domestic bourse. A decline in LME inventory by 3,875 tn to 290,675 tn also supported the positive cue.


LEAD contract gained due to buying in physical market and escalation in the South China Sea. Approximately 33,400 tn of LME stocks on warrants are held in Taiwan and South Korea, which could come under threat if the situation turns worse. 


* At 1650 IST, on the MCX, the August futures contract of:

 –Aluminium was at 207.90 rupees, up 0.1% 

 —COPPER was at 641.65 rupees a kg, down 0.1% 

 –Lead was at 177.10 rupees a kg, up 0.4%

 –Zinc was at 298.35 rupees a kg, up 1.3%


* Outlook for the evening session on MCX:

 –Aluminium contract seen at 205.60-211.60 rupees a kg

 –Copper seen at 638.10-647.30 rupees a kg

 –Lead seen at 176.0-178.70 rupees a kg

 –Zinc seen at 291.20–302.30 rupees a kg




US$1 = 79.46 rupees

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


Edited by Vidhi Verma


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Source: Cogencis

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