Informist, Monday, Jul 25, 2022
By Sandeep Sinha
MUMBAI – Futures contracts of most base metals rose on the Multi Commodity Exchange of India as the dollar weakened against a basket of major currencies, which makes dollar-denominated commodities cheaper for holders of other currencies.
* However, weighing on sentiment were forced resignations of China Evergrande Group's Chief Executive Officer Xia Haijun and Chief Financial Officer Pan Darong amid a probe regarding $2 bln worth of deposits. The deposits were used as security for third parties to obtain bank loans, which some borrowers failed to repay. The real estate sector is one of the largest consumers of base metals.
* "Base metals declined with stocks on a dimmer economic outlook that possibly includes recessions in major economies. Surveys by S&P Global showed business activity shrinking this month in both the US and Europe -- fueling worries and pushing investors to havens including Treasuries,” said Tapan Patel, senior analyst at HDFC Securities.
* "This week’s key event may be the Federal Reserve’s policy meeting, expected to herald another 75 basis-points hike in interest rates to squeeze inflation. Investors are also watching Beijing’s reported moves to roll out financial support for property developers", Patel said.
* Germany Ifo Business Climate Index fell to 88.6 in July from 92.3 in June, signalling recessionary pressure on the economy.
* The latest hard macro data has confirmed the concern that the German economy might already have contracted in the second quarter of the year, said ING Economics. Weaker global demand, supply chain frictions, and high inflation denting consumption are hitting the German economy, it added.
* ALUMINIUM prices declined as traders rolled over their short positions in the domestic bourse.
* COPPER contracts rose due to short covering of positions by traders on the MCX. The positive sentiment was further boosted by lower supply from top miners and a fall in LME stocks by 750 tn.
* At 1635 IST, on the MCX, the July futures contract of:
--Aluminium was at 209.80 rupees, down 0.8%
--Copper was at 630.60 rupees a kg, up 0.6%
--LEAD was at 177.55 rupees a kg, up 0.1%
--ZINC was at 278.95 rupees a kg, up 0.5%
* Outlook for the evening session on MCX:
--Aluminium contract seen at 206.50-214.0 rupees a kg
--Copper seen at 623.0-636.0 rupees a kg
--Lead seen at 176.0-180.0 rupees a kg
--Zinc seen at 272.50–282.50 rupees a kg
End
US$1 = 79.73 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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