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Informist, Monday, Oct. 28, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of most base metals fell on the Multi Commodity Exchange of India and the London Metal Exchange Monday as stimulus measures from top consumer China failed to ease demand worries, analysts said. The sentiment was also weighed down by risk aversion ahead of the US presidential election on Nov. 5.

However, further downside in base metals prices was cushioned by a weak dollar. At 1718 IST, the dollar index, which measures the strength of the greenback against a basket of six 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.

There are also growing predictions that the Federal Reserve would take a more cautious approach to future rate decreases, Motilal Oswal said in a note. The S&P global flash US Purchasing Managers' Index rose to 54.3 in October from 54.0 in September and the Services Purchasing Managers' Index rose to 55.3 in October from 55.0 last month. According to Fed fund futures, market participants now expect interest rates in the US to be cut by only 25 basis points in each of the November and December meetings. 

Investors await China's National People's Congress meeting from Nov. 4 to Nov. 8 to get more cues about additional stimulus measures. Markets are anticipating a stimulus package of up to 10 trillion yuan ($1.4 trillion) aimed at supporting China's full-year growth targets, SMC Research said in a note. Investors will also watch out for China's manufacturing purchasing managers' index due Thursday and the US non-farm payroll data due Friday.

COPPER prices rose on expectations of further stimulus from China and a weaker dollar. 

ZINC prices fell as inventories in warehouses registered with the LME rose by 4,650 tonnes to 247,075 tonnes.

At 1718 IST, on the MCX, the November futures contracts of:

-ALUMINIUM was at INR 242.00 per kg, down 0.7%

-Copper was at INR 838.30 per kg, up 0.2% 

-LEAD was at INR 180.70 per kg, down 0.6% 

-Zinc was at INR 285.60 per kg, down 0.6%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 240.00-INR 245.45 

-Copper contract seen at INR 832.25-INR 845.00 

-Lead contract seen at INR 179.50-INR 182.50

-Zinc contract seen at INR 282.50-INR 288.00

End

US$1 = INR 84.08

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

Edited by Manisha Baxla

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