Informist, Monday, Sep 4, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of all base metals fell today on the Multi Commodity Exchange of India and the London Metal Exchange due to stiff resistance at higher levels and profit-booking after a sharp rally last week. The sentiment was also dampened by weak investor confidence in the euro area and rising stocks of copper and lead at LME-registered warehouses.
The non-ferrous metal prices retreated as market players assessed the recent policy measures announced by top consumer China and its impact on the economy.
Investor confidence in the Euro area slipped to minus 21.5 in September from minus 18.9 in August, according to a report by Sentix.
Exports in Europe’s largest economy, Germany, fell 0.9% on month in July from a growth of 0.2% on month in June. “Supply chain frictions, a more fragmented global economy and China increasingly being able to produce goods it previously bought from Germany, are all factors weighing on the German export sector,” ING Economics said in a note.
The trading volume was thin as the US market was shut for Labor Day Holiday.
However, the downside in the base metals was limited by weakness in the dollar, which makes commodities priced in the greenback cheaper for holders of other currencies. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.2% at 104.09 on prospect of a pause by US Federal Reserve in September meeting.
Investors will take further cues from the release of China Caixin services purchasing managers’ index data on Tuesday and US Institute of Supply Management services purchasing managers’ index data on Wednesday.
ALUMINIUM prices fell because of unwinding of long positions by commodity trading advisers on the LME and limited buying activity in the physical market.
COPPER prices slipped due to a rise in stocks by 3,150 tn at LME-registered warehouses. Traders increasing their short positions on the domestic bourse also weighed on prices.
LEAD contracts fell because of an increase in stocks by 500 tn at LME-approved warehouses.
ZINC contracts traded lower due to weakness in steel prices as the metal is used for galvanisation.
* At 1815 IST, on the MCX, the September futures contract of:
–Aluminium was at 201.35 rupees a kg, down 1%
–Copper was at 736.55 rupees a kg, down 0.5%
–Lead was at 187.45 rupees a kg, down 0.7%
–Zinc was at 220.60 rupees a kg, down 0.1%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 199.0-204.0 rupees
–Copper seen at 730.0-745.0 rupees
–Lead seen at 186.0-189.50 rupees
–Zinc seen at 218.0–224.0 rupees
End
US$1 = 82.75 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Manisha Baxla
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