Informist, Thursday, Apr 28, 2022
By Sayantan Sarkar
MUMBAI – Futures of most base metals fell on the Multi Commodity Exchange of India today, taking cues from the London Metal Exchange as the dollar continued to climb, while lockdowns in China dulled the demand outlook.
* The dollar has surged in the last few sessions, which has made commodities priced in the greenback more expensive for holders of other currencies.
* Meanwhile, lockdowns in China’s Shanghai have started taking a toll on economic activities. Authorities were also conducting mass testing of COVID-19 in Beijing to avert a situation like Shanghai. China is one of the top consumers of base metals, and the lack of demand has hurt prices.
* Chinese President Xi Jinping on Tuesday pressed for “all-out efforts” to speed up infrastructure spending to revive the slowing economy. The People’s Bank of China also announced that it would provide monetary support to the economy, especially to industries and small businesses hit hard by the pandemic.
* However, China’s push to revive its economy has failed to lift prices of base metals so far.
* “No fish looks to be biting when it comes to buying in on Chinese stimulus bets–at least not in Asia without any concrete measures announced,” Dow Jones wire quoted Marex Spectron in a report. “Market continues to be in a wait-and-see [mode] and pretty much risk-averse given lack of any obvious trend.”
* Investors are awaiting the upcoming meeting of the US Federal Reserve next month, when the central bank is expected to raise interest rates by a further 50 basis points to combat rising inflation in the country.
* Escalation of geopolitical tensions between the European Union and Russia, as the latter threatened to cut off gas supply to the region, supported prices of ALUMINIUM and NICKEL. Russia had halted supplies of gas to Poland and Bulgaria as both countries had failed to make payments in rubles.
* At 1629 IST, on the MCX, the April futures contract of:
–Aluminium was at 257.0 rupees, up 0.4%
–Copper was at 780.50 rupees a kg, down 1.1%
–Nickel was at 2,575.0 rupees a kg, up 0.9%
–Lead was at 183.0 rupees a kg, down 0.6%
–Zinc was at 360.0 rupees a kg, down 0.1%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 252.2-262.0 rupees per kg
–Copper seen at 779.5-803.1 rupees per kg
–Nickel seen at 2,536.7-2,578.7 rupees per kg
–Lead seen at 181.6-190.1 rupees per kg
–Zinc seen at 351.1–364.1 rupees per kg
End
US$1 = 76.48 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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