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Informist, Tuesday, Dec. 10, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals fell on the Multi Commodity Exchange of India, tracking a fall in contracts on the London Metal Exchange, as the dollar extended gains for the third consecutive day. Market sentiment was also weighed down by the lack of a substantial fiscal stimulus from China, analysts said.

At 1610 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.2% at 106.34. A stronger greenback makes dollar-denominated commodities, such as base metals, expensive for buyers holding other currencies, denting demand.

China's top decision-making body, the Politburo, voted Monday for more proactive fiscal measures and moderately looser monetary policy next year to boost domestic consumption, raising hopes of further stimulus measures. While this marked the clearest signal of stimulus in many years, the response in the metals market was more muted, Daria Efanova, head of research at Sucden Financial, said in a note.

"We attribute this cautious reaction to lingering doubts surrounding the region’s long-term growth prospects, particularly in the construction sector. We believe it will take more than just stimulus measures to fully rejuvenate economic growth," Efanova said.

However, any further downside in prices was restricted by a fall in inventories at warehouses registered with the LME. Copper stocks fell by 1,700 tonnes to 268,100 tonnes and aluminium inventories fell by 2,000 tonnes to 679,600 tonnes. Zinc inventories fell by 1,075 tonnes to 277,050 tonnes and lead stocks fell by 2,750 tonnes to 268,550 tonnes.

Investors await the US core CPI due Wednesday and China's central economic work conference starting the same day for further cues.

At 1618 IST, on the MCX, the December futures contract of:

–ALUMINIUM was at INR 243.50 a kg, down 0.1%

–COPPER was at INR 828.00 a kg, down 0.4%

–LEAD was at INR 180.50 a kg, down 0.4%

–ZINC was at INR 290.50 a kg, down 0.4%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 241.10-246.60

-Copper contract seen at INR 812.10-843.20

-Lead contract seen at INR 178.70-183.90

-Zinc contract seen at INR 282.70-297.00

End

US$1 = INR 84.85

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

Edited by Rajeev Pai

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