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Informist, Tuesday, Nov. 5, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India and the London Metal Exchange Tuesday as the dollar weakened on expectation of another interest rate cut by the US Federal Reserve early Friday. The positive sentiment was also lifted by a fall in inventories at warehouses registered with the LME.

At 1806 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 103.74. "Rate cut expectations along with weak labour market data is weighing on the dollar index, supporting industrial metals," Motilal Oswal said in a note.

Aluminium stocks in LME-registered warehouses fell by 2,500 tonnes to 739,400 tonnes and zinc stocks fell by 1,500 tonnes to 245,675 tonnes. Copper inventories fell by 875 tonnes to 272,975 tonnes.

The announcement of the stimulus package by China in September had boosted base metals prices, while lack of details in these measures in October had weighed on them. It is now expected that the first details and size of the stimulus will be released Friday, following the approval by the parliamentary standing committee, Commerzbank said in a report.

For further cues, investors await the outcome of the US Federal Open Market Committee meeting early Friday and the outcome of the US presidential election. They will also keep an eye on the China's National People's Congress meeting till Friday to get cues on further fiscal measures.

Investors appear optimistic and believe these events will aid demand for base metals despite expectations of volatility in prices over the next few days, Dow Jones cited analysts at Nanhua Futures as saying in a note.

COPPER prices rose on the MCX, hitting a four-week high of INR 861.5 per kg, driven by investor focus on the US election outcome, Kedia Advisory said in a note. A victory by Republican candidate Donald Trump could trigger a risk-on rally, while a Democratic candidate Kamala Harris win could ease tariff concerns for metals.

At 1715 IST, on the MCX, the November futures contracts of:

-Aluminium was at INR 243.00 per kg, up 0.9%

-Copper was at INR 859.50 per kg, up 0.8%

-Lead was at INR 182.15 per kg, up 0.1%

-Zinc was at INR 286.50 per kg, up 1.1%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 237.00-INR 243.00

-Copper contract seen at INR 850.00-INR 866.00

-Lead contract seen at INR 180.50-INR 185.00

-Zinc contract seen at INR 282.00-INR 289.00

End

US$1 = INR 84.10

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

Edited by Akul Nishant Akhoury

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