India Base Metals: Most up on short-covering; firm dollar caps gains

Informist, Friday, May 12, 2023

By Sandeep Sinha

MUMBAI – Futures of most base metals rose on the Multi Commodity Exchange of India and the London Metal Exchange because of short-covering after a sharp sell-off on Thursday. However, the upside was limited due to firm dollar, making dollar-denominated commodities expensive for foreign holders. 

The dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 102.22.

“We have started to see evidence of some physical buy interest in the likes of copper with aliminium, in particular now into an area where there is a consumer bid. However, whilst we also have seen some contrarian models buy, which makes sense ahead of the weekend amid a low risk outlook,” Al Munro at broker Marex said in a note.

For further cues, investors also look forward to University of Michigan consumer sentiment and inflation expectations survey to be released later in the day.

ALUMINIUM prices witnessed technical rebound from oversold levels and short-covering of positions by traders on the domestic exchange.

COPPER prices rose due to short-covering of positions by market players on the MCX. However, upside was restricted due to a rise in stocks by 675 tn at LME-approved warehouses and firm dollar.

LEAD contracts gained as traders increased their long positions on the domestic bourse. The short-and-medium term trend has turned positive and prices have moved above the 20- and 50-day simple moving average on the daily chart.

ZINC contracts fell on the MCX, despite positive cues from the LME as traders increased their short positions and price trading below key averages on the daily chart.

* At 1910 IST, on the MCX, the May futures contract of:

 –Aluminium was at 206.50 rupees a kg, up 0.3% 

 –Copper was at 732.35 rupees a kg, up 0.4% 

 –Lead was at 184.30 rupees a kg, up 0.3%

 –Zinc was at 230.20 rupees a kg, down 0.2%

* Outlook for the evening session on the MCX:

 –Aluminium contract seen at 204.0-209.0 rupees

 –Copper seen at 720.0-736.0 rupees

 –Lead seen at 183.50-185.50 rupees

 –Zinc seen at 227.0–232.50 rupees

End

US$1 = 82.16 rupees

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

Edited by Akul Nishant Akhoury

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