Industrial metals (copper, aluminium, nickel, etc.) daily review (January 09, 2014)
January 9, 2014, Thursday, 16:59 GMT | 11:59 EST | 22:29 IST | 00:59 SGT
Base metals on the LME traded on a negative note yesterday taking cues from Federal Reserve’s meeting minutes which heightened expectations of further tapering in the monetary stimulus, thereby curbing demand for the base metals. Also, strength in the DX coupled with mixed market sentiments exerted downside pressure on prices of the base metals. However, favorable economic data from the Euro Zone and the US restricted sharp negative movement in the base metals. Additionally, decline in LME inventories prevented sharp fall in the prices
In the Indian markets, base metals traded lower owing to Rupee appreciation.
LME Copper fell by 0.5 percent on the back of mounted expectations of further QE taper by the Federal Reserve after minutes of FOMC meet were released yesterday. Also, strength in the DX coupled with mixed global market sentiments acted as negative factors. However, decline in LME inventories along with positive economic data from the Euro Zone cushioned sharp downside in prices. The red metal touched an intra-day low of $7315/tonne and closed at $7316.25/tonne on Wednesday.
MCX Copper prices declined by 0.5 percent on account of Rupee appreciation touching an intra-day low of Rs.462.6/kg and closed at Rs.463.05/kg on Wednesday.
We expect base metals to trade on a mixed note on the back of positive economic data from the Euro Zone and US. Also, favorable inventory scenario especially in case of Copper will act as a supportive factor. However, fears of further QE taper by the Federal Reserve will restrict sharp positive movement or even reversal in the prices. Further, strength in the DX will exert downside pressure.
In the Indian markets, sharp downside in the prices will be restricted due to depreciation in the Indian Rupee.