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Informist, Monday, Nov. 4, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of COPPER rose on the Multi Commodity Exchange of India and the London Metal Exchange on Monday because of weakness in the dollar index. The positive sentiment also got a boost from hope of fiscal stimulus from top consumer of metals China at the upcoming Chinese National People's Congress meeting, analysts said.

"The reason for copper prices to move north was mostly the disappointing release of the US October jobs data that has firmed up chances of Federal Reserve interest-rate cut in the coming week to weaken the dollar. A soft labour market made traders price in about a 99% chance of a quarter-point interest-rate cut for the US central bank meeting on Nov. 7, compared to 92% before," Saish Sandeep Sawant Dessai, analyst, base metals, Angel One Ltd. said in a note.

At 1823 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was down 0.2% at 103.68. A weak dollar makes commodities priced in the greenback, such as copper, cheaper for buyers holding other currencies.

On the option front, the highest call open interest for MCX copper was at INR 840 strike price, suggesting a bullish view. The highest put open interest was at INR 830 strike for the Nov. 20 expiry.

"If the copper prices breaks above the resistance level of INR 850, it could rise further to INR 856 and INR 863. However, if the price breaks below the support level of INR 838, it could signal a downward trend, potentially leading to a fall to INR 830 or even INR 822," Enrich Money said in a note to clients.

The Caixin China Manufacturing Purchasing Managers' Index rose to 50.3 in October from 49.3 in the previous month, signalling conditions in the manufacturing sector improved following a brief deterioration in September.

Additionally, China's property market is likely to continue to recover in the near term, Dow Jones cited analysts at CCB International as saying in a note. The property sector has seen a strong recovery in October due to earlier stimulus measures. If property sales miss expectations in the following months, China is likely to roll out more stimulus measures, they said.

For further cues, investors await the US presidential elections Tuesday and the US Federal Open Market Committee meeting Friday. They will also keep an eye on the Chinese National People's Congress meeting till Friday.

ALUMINIUM prices traded in the red as traders pared their long positions on the domestic bourse. The sentiment was also weighed down by rising inventories at warehouses registered with the LME. Stocks rose by 5,700 tonnes to 741,900 tonnes.

LEAD contracts traded lower as market participants trimmed their long positions on the MCX. 

ZINC contracts declined due to liquidation of long positions by traders on the LME and domestic exchange.

At 1823 IST, on the MCX, the November futures contracts of:

-Aluminium was at INR 239.55 per kg, down 0.8%

-Copper was at INR 848.90 per kg, up 0.1%

-Lead was at INR 181.80 per kg, down 0.5%

-Zinc was at INR 284.15 per kg, down 0.6%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 234.40-INR 245.20

-Copper contract seen at INR 837.30-INR 863.60

-Lead contract seen at INR 179.30-INR 184.40

-Zinc contract seen at INR 276.50-INR 293.50

End

US$1 = INR 84.12

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

Edited by Deepshikha Bhardwaj

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