India Base Metals
Up tracking LME on hopes of improvement in China demand
This story was originally published at 19:52 IST on 1 October 2024
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By Ashutosh Pati
MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India tracking rise in contracts on the London Metal Exchange on hopes of improvement in demand from China, after the country announced a series of stimulus measures to boost its economy, analysts said. However, the rise in base metals prices was limited because of a firm dollar and a week-long national holiday in China, they said.
China's central bank Sunday said it would ask banks to lower mortgage rates for existing home loans before Oct. 31, as part of sweeping policies to support the country's beleaguered property market, Reuters reported. The property sector is one of the biggest users of base metals.
"The recent announcement of a significant economic rescue package by Chinese authorities has reignited investor confidence. Beijing became the latest major city to ease curbs on home buying, part of the government's renewed push to try and rejuvenate the slumping property market," Kotak Securities said in a note.
A firm dollar makes commodities priced in the greenback expensive for holders of other currencies. At 1750 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was up 0.4% at 101.11.
The market will take further cues from the US Institute of Supply Management manufacturing purchasing managers' index to be released later in the day. They will also take cues from US September nonfarm payrolls data, due later this week.
COPPER prices rose on the MCX tracking gains on the LME. Prices continue to be supported by positive sentiment over Beijing's stimulus measures, ANZ research analysts said in a commentary.
ALUMINIUM prices traded in the green supported by falling inventories across exchanges, Ajay Kedia, director at Kedia Advisory, said. Aluminium stocks at Shanghai Futures Exchange-monitored warehouses are at their lowest since Feb. 18 at 279,171 tonnes. Inventories at warehouses registered with the LME have fallen by 6% on month to 790,450 tonnes.
ZINC prices rose tracking gains on the LME because of a fall in stocks by 1,550 tonnes at exchange-accredited warehouses. Traders increasing their long positions on the domestic exchange also aided the prices.
At 1808 IST, on the MCX, the October futures contracts of:
- Aluminium was at INR 239.70 per kg, up 0.9%
- Copper was at INR 857.10 per kg, up 0.7%
- LEAD was at INR 184.55 per kg, up 0.1%
- Zinc was at INR 283.90 per kg, up 1.2%
Trading levels for the day on the MCX:
- Aluminium contract seen at INR 235.45-INR 242.40
- Copper contract seen at INR 842.50-INR 862.00
- Lead contract seen at INR 182.50-INR 186.40
- Zinc contract seen at INR 278.60-INR 288.55
End
US$1 = INR 83.82
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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