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Informist, Tuesday, Jul 30, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of all base metals on the Multi Commodity Exchange of India and the London Metal Exchange rose today because of short-covering after a sharp fall in the past few sessions. The positive sentiment further got a boost from a fall in stocks at LME-registered warehouses and a weakness in the dollar, which makes dollar-denominated commodities cheaper for buyers holding other currencies.

LME stocks of ALUMINIUM fell by 3,500 tn to 933,125 tn, COPPER stocks declined 125 tn to 239,275 tn, LEAD stocks fell by 3,025 tn to 236,925, and ZINC stocks fell by 2,050 tn to 236,375 tn.

At 1915 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.5% at 103.95 ahead of US Federal Reserve interest rate decision later today.

"Base metals are trading positive after weak factory data from China bolstered expectations for Beijing to take stronger action to support a struggling economy," Kotak Securities said in a note.

China's National Bureau of Statistics data today showed the official Manufacturing Purchasing Manager Index fell to 49.4 in June from 49.5 in May. A reading below 50 indicates contraction in the economy.

ALUMINIUM prices rose because of short-covering of positions by traders on the domestic exchange.

COPPER prices gained due to a weaker dollar and short-covering of positions by market participants on MCX.

LEAD contracts traded higher, taking cues from other base metals and short-covering by traders on the domestic bourse.

ZINC contracts traded in the green owing to short-covering and a recovery in steel prices. The metal is used for galvanisation.

At 1915 IST, on the MCX, the August futures contract of:

–Aluminium was at 215.00 rupees a kg, up 2.7%

–Copper was at 795.50 rupees a kg, up 1.9%

–Lead was at 187.45 rupees a kg, up 1%

–Zinc was at 255.10 rupees a kg, up 1.6%

Outlook for the evening session on the MCX:

–Aluminium contract seen at 209.30-217.00 rupees

–Copper seen at 786.60-810.80 rupees

–Lead seen at 185.50-188.80 rupees

–Zinc seen at 250.10-256.10 rupees

End

US$1 = 83.72 rupees

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

Edited by Deepshikha Bhardwaj

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