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Informist, Wednesday, Nov. 6, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals fell on the Multi Commodity Exchange of India and the London Metal Exchange as the dollar index surged to a four-month high, following Donald Trump's win in the US presidential election. A firm greenback makes dollar-denominated commodities such as base metals expensive for buyers holding other currencies. 

At 1831 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 1.9% at 105.40.   

However, the further slide in prices of base metals was cushioned by the hope of further fiscal measures from China's ongoing National People's Congress meeting. The downturn in base metals prices came after three consecutive sessions of gains driven by positive economic data from China, suggesting that the recent stimulus measures may be yielding results, Kotak Securities said in a note. Additional stimulus measures could boost demand for non-ferrous metals in top consumer China.

The odds of a larger policy support package by China will rise somewhat with Trump's victory, though it may not necessarily be announced immediately, ING Economics said in a report.

For further cues, investors await the outcome of the China's National People's Congress meeting Friday and the US Federal Open Market Committee meeting decision early Friday.

ALUMINIUM prices fell because of risk aversion and a rally in the dollar.

COPPER prices fell, taking cues from LME, as the medium trend for metal had turned negative. The price gave a breakdown below the crucial 50-day and 100-day simple and exponential moving averages, which led to stop losses being hit and unwinding of long positions by commodity trading advisers.

LEAD contracts traded lower, tracking losses in other industrial metals. 

ZINC contracts extended decline and traded at the low point of day as traders increased their short positions on the domestic exchange.

At 1831 IST, on the MCX, the November futures contracts of:

-Aluminium was at INR 238.60 per kg, down 2%

-Copper was at INR 830.50 per kg, down 3.4%

-Lead was at INR 180.80 per kg, down 0.6%

-Zinc was at INR 278.10 per kg, down 3.4%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 236.90-INR 247.50

-Copper contract seen at INR 828.70-INR 859.90

-Lead contract seen at INR 179.40-INR 184.30

-Zinc contract seen at INR 275.80-INR 292.90

End

US$1 = INR 84.28

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

Edited by Deepshikha Bhardwaj

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