Informist, Thursday, Sep 21, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of all base metals on the Multi Commodity Exchange of India and the London Metal Exchange fell today due to a broad-based sell-off across asset classes amid increased risk aversion and a firm dollar after the US Federal Reserve indicated another rate hike in 2023.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.4% at 105.73, a six-month high. A stronger greenback makes dollar-denominated commodities such as non-ferrous metals expensive for holders of other currencies.
The US Federal Open Market Committee kept interest rates unchanged at 5.25-5.50% on Wednesday. Federal Reserve Chair Jerome Powell said rates were likely to remain higher for a longer time amid strength in the US economy.
At its polict meeting today, the Bank of England today kept interest rate unchanged at 5.25% by a majority of five-to-four. Similarly, the Swiss National Bank kept its policy rate unchanged at 1.75%, but hinted at a further rate hike.
ALUMINIUM prices fell, taking cues from LME and rising production in China.
COPPER prices slipped due to a firm dollar and a rise of 7,200 tn in stocks at LME-registered warehouses.
LEAD contracts fell because of liquidation of long positions on the LME and the Shanghai Futures Exchange. The sentiment was also hurt by a rise of 425 tn in stocks at LME-accredited warehouses.
ZINC contracts traded lower tracking weakness in steel prices as the metal is used in galvanisation.
* At 1810 IST, on the MCX, the September futures contract of:
–Aluminium was at 202.0 rupees a kg, down 1.2%
–Copper was at 711.95 rupees a kg, down 2.1%
–Lead was at 186.55 rupees a kg, down 0.6%
–Zinc was at 219.70 rupees a kg, down 1.9%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 200.50-205.20 rupees
–Copper seen at 708.0-723.0 rupees
–Lead seen at 184.50-189.40 rupees
–Zinc seen at 218.50–224.0 rupees
US$1 = 83.09 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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