Informist, Thursday, Jan 11, 2024

By J. Navya Sruthi

MUMBAI – Futures contracts of all base metals traded higher on the Multi Commodity Exchange of India today, tracking those on the London Metal Exchange, on softening of the dollar index ahead of the US inflation data due out later in the day, analysts said. The inflation data is expected to give market participants more clarity about the US Federal Reserve's stance on interest rates.

A softer greenback makes commodities priced in dollars cheaper and hence more attractive for investors holding other currencies. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.34.

LME base metals traded higher in line with improved risk sentiment ahead of US inflation data, Kotak Securities said in a note.

The US headline inflation data are likely to show that price pressure has eased further, while jobless claims data are projected to show that a greater number of people filed for benefits, ICICI Securities said in a note.

Analysts polled by Dow Jones expect headline inflation in the US to inch higher to 3.2% on year in December from 3.1% in November, while the core CPI is expected to ease to 3.8% on a yearly basis from 4% a month ago. 

Markets also anticipate an easing of lending rates in China this year. LME base metals gained support as traders piled on the bets that the People’s Bank of China will ease its policy rates further this year to support growth, Kotak Securities said.

ALUMINIUM prices rose on the MCX tracking those on the LME as Alcoa Corp plans to curtail production this year at one of its three Western Australian refineries as the top US aluminium producer begins to reckon with cost-cutting measures, the brokerage added.

COPPER prices rose on the MCX tracking those on the LME as inventories declined by 1,650 tn at LME registered warehouses.

Investors also await inflation data from China, scheduled to be released on Friday. 

At 1635 IST, on the MCX, the January futures contract of:

–Aluminium was at 203.7 rupees a kg, up 0.2%

–Copper was at 719.8 rupees a kg, up 0.5%

–LEAD was at 182.8 rupees a kg, up 0.2%

–ZINC was at 224.1 rupees a kg, up 0.6%

Outlook for the evening session on the MCX:

–Aluminium contract seen at 201.5-204.9 rupees

–Copper seen at 713.8-720.5 rupees

–Lead seen at 180.7-183.4 rupees

–Zinc seen at 220.8-225.6 rupees

End

US$1 = 83.03 rupees

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

Edited by Rajeev Pai

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