Informist, Wednesday, May 24, 2023
By Sandeep Sinha
MUMBAI – Future contracts of all base metals fell on the Multi Commodity Exchange of India and the London Metal Exchange as the market sentiment was rattled by the prospect of US debt default, firm dollar and sell-off in riskier assets.
US House Speaker Kevin McCarthy expressed his doubt over reaching a deal on raising debt-ceiling limit on Tuesday, Fox News reported.
The dollar index rose to a fresh two-month high of 103.76 against a basket of major currencies ahead of the release of the Federal Open Market Committee's meeting minutes later today. A firm greenback makes dollar-denominated commodities expensive for holders of other currencies.
The sentiment in non-ferrous metals was dented by weak economic data from Germany. Germany’s Institute for Economic Research Business Climate Index slipped to 91.7 in May from 93.6 in April. "The first drop in the Ifo index after a six-month rally is further confirmation of fading optimism and new growth concerns," said ING Economics in a report.
Apart from Federal Reserve minutes, investors will also take cues from Treasury Secretary Janet Yellen’s speech later today.
ALUMINIUM prices fell as market players rolled over their short positions on the domestic exchange.
COPPER prices on LME slipped below $8,000 per tn, for the first time since November on demand concerns and a firm dollar. The sentiment was also weighed down by the continued rise in LME-registered warehouses’ stocks.
"Copper has been under pressure as a raft of data in recent weeks has shown the post-virus rebound in China, which consumes around half of the world’s copper, is stuttering," Kotak Securities said in a note.
LEAD contracts fell as traders liquidated their long positions on the MCX and weak risk appetite.
ZINC contracts touched a fresh 52-week low on the domestic exchange and LME on muted demand.
* At 1640 IST, on the MCX, the May futures contract of:
–Aluminium was at 207.85 rupees a kg, down 0.5%
–Copper was at 700.65 rupees a kg, down 1.7%
–Lead was at 182.50 rupees a kg, down 0.1%
–Zinc was at 209.55 rupees a kg, down 2.4%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 206.40-209.0 rupees
–Copper seen at 696.40-712.0 rupees
–Lead seen at 181.70-183.20 rupees
–Zinc seen at 208.40–214.0 rupees
End
US$1 = 82.66 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Maheswaran Parameswaran
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