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Informist, Thursday, Jul 25, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of all base metals on the Multi Commodity Exchange of India and the London Metal Exchange fell today because of weak risk sentiment, concern about demand, and continued selling by commodity trading advisers. The sentiment in non-ferrous metals was dampened by weak economic data from Germany.

"Base metals continue to trade under pressure due to concerns about industrial and property market issues in China, which are affecting demand prospects," Kotak Securities said in a note.

Germany’s Institute for Economic Research Business Climate Index slipped to 87 in July from 88.6 in June, the third month of fall. "A weaker global economic outlook, policy uncertainty in both France and Germany as well as the potential implications of the US presidential elections for Europe seem to be weighing on business sentiment," ING Economics said in a note.

Investors have now turned their focus on US GDP data, due later today, and the US Core Personal Consumption Expenditures Price Index, the preferred inflation gauge of the US Federal Reserve, due on Friday.

However, further downside in non-ferrous metals was cushioned by the People's Bank of China, which today lowered its one-year medium-term lending facility loan rate from 2.5% to 2.3%, and weakness in the dollar.

At 1715 IST, the dollar index, which measures the strength in the greenback against a basket of major currencies, was down 0.2% at 104.22. A weaker greenback makes dollar-denominated commodities, such as base metals, cheaper for holders of other currencies.

ALUMINIUM prices fell as traders increased their short positions on the domestic exchange.  

COPPER prices fell due to concern about demand and traders raising their bearish positions on the MCX. The red metal today breached the 200-day simple moving average on the LME, which also weighed on sentiment.

LEAD prices were down tracking weakness in other base metals.

ZINC contracts underperformed other non-ferrous metals on the downside because of worries about Chinese property market.

At 1735 IST, on the MCX, the August futures contract of:

–Aluminium was at 211.60 rupees a kg, down 0.8%

–Copper was at 790.35 rupees a kg, down 1.1%

–Lead was at 184.85 rupees a kg, down 0.4%

–Zinc was at 250.30 rupees a kg, down 1.3%

Outlook for the evening session on the MCX:

–Aluminium contract seen at 208.00-215.00 rupees

–Copper seen at 781.00-797.00 rupees

–Lead seen at 183.00-187.00 rupees

–Zinc seen at 246.00-254.00 rupees

End

US$1 = 83.70 rupees

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

Edited by Akul Nishant Akhoury

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