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Informist, Tuesday, Sep 17, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of most base metals fell on the Multi Commodity Exchange of India today because of a disappointing set of economic data from China, the world's top consumer of base metals, analysts said. The sentiment was also hurt by rising stocks in warehouses registered with the London Metal Exchange.

Additionally, there was low liquidity today because of a national holiday in China, they said.

China's industrial output rose 4.5% on year in August, down from 5.1% in July, marking the slowest growth since March, National Bureau of Statistics data showed on Saturday. China's fixed-asset investment rose 3.4% on year in August, slower than the forecast of 3.5% growth, analysts said. 

The fall in prices of base metals was limited by the weakness in the dollar, which makes dollar-denominated commodities cheaper for holders of other commodities. At 1534 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was at 100.64, down 0.1%.

Hopes of a fresh round of stimulus from China also limited the losses in base metal prices, analysts said. "China’s central bank indicated it would intensify efforts against deflation and prepare additional policies to revive the economy," Kotak Securities said in a note.

Traders are now waiting for the outcome of the US Federal Reserve's policy meeting on Wednesday. According to the CME FedWatch Tool, the probability of a 50-basis-point interest rate cut is now 67% compared with 33% for a 25-bps cut. A rate cut would boost economic growth and raise demand for metals, while also placing downward pressure on the dollar, Motilal Oswal said in a note.

ZINC prices fell on the MCX, tracking losses on the London Metal Exchange, as inventories in LME-registered warehouses rose by 12,950 tn to 247,100 tn.

LEAD prices fell on the MCX, tracking losses on the London Metal Exchange, as lead stocks in LME-registered warehouses rose by 30,225 tn to 205,000 tn.

At 1600 IST, on the MCX, the September futures contracts of:

- ALUMINIUM was at 231.15 rupees per kg, down 0.3%

- COPPER was at 810.70 rupees per kg, up 0.2%

- LEAD was at 182.80 rupees per kg, down 0.9%

- ZINC was at 268.10 rupees per kg, down 0.7%

Trading levels for the day on the MCX:

- Aluminium contract seen at 229.00-234.70 rupees 

- Copper contract seen at 805.00-815.00 rupees

- Lead contract seen at 181.00-185.60 rupees

- Zinc contract seen at 264.40-273.00 rupees

End

US$1 = 83.75 rupees

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

Edited by Saji George Titus

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