Informist, Friday, Feb 2, 2024
By Sandeep Sinha
MUMBAI – Futures contracts of all base metals fell today on the Multi Commodity Exchange of India, tracking those on the London Metal Exchange, after the International Monetary Fund cut China’s 2024 GDP forecast.
The IMF lowered China’s GDP growth to 4.6% for 2024, compared with its earlier estimate of 5.1%, because of continued weakness in the country’s property sector and low external demand, it said in a report today. The real estate sector is one of the biggest users of non-ferrous metals.
“Real estate has long been important for China’s economy, driving its rapid growth in recent decades and accounting for as much as 20% of activity,” the IMF said.
The weak risk sentiment among market participants ahead of the Chinese Lunar New Year holiday also weighed on base metals prices. Investors will take further cues from US nonfarm payrolls data for January, set to be released later today. The data are expected to provide cues on the US Federal Reserve’s interest rate stance at its March policy meeting.
Analysts polled by Dow Jones estimated the payrolls to come in at 185,000 in January, against 216,000 in December. “Any signs of weakness in the labour market might improve the odds of March rate cuts, while resilience might prompt investors to push back against early rate cuts,” Kotak Securities said in a note.
Investors will also look out for the revised University of Michigan Consumer Sentiment Survey, also due later today.
ALUMINIUM prices fell because of sluggish demand in China. Traders increasing short positions on the domestic exchange also hit prices.
COPPER prices traded lower ahead of the US nonfarm payrolls data. The metal traded near the day’s low after a gap-down start on the domestic bourse as market participants continued to increase their bearish positions.
At 1805 IST, on the MCX, the February futures contract of:
–Aluminium was at 201.80 rupees a kg, down 0.4%
–Copper was at 723.20 rupees a kg, down 0.5%
–LEAD was at 181.65 rupees a kg, down 0.2%
–ZINC was at 221.95 rupees a kg, down 0.3%
Outlook for the evening session on the MCX:
–Aluminium contract seen at 200.20-203.20 rupees
–Copper seen at 717.90-728.20 rupees
–Lead seen at 180.90-182.50 rupees
–Zinc seen at 219.0-221.90 rupees
End
US$1 = 82.92 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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