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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (May 02, 2014)

May 2, 2014, Friday, 04:50 GMT | 23:50 EST | 08:20 IST | 10:50 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME apart from Nickel traded on a negative note yesterday taking cues from QE tapering of another $10 billion by the Federal Reserve. Also, mixed market sentiments coupled with strength in the DX acted as a negative factor. Further, mixed economic data from Euro Zone along with mixed trend in inventories exerted downside pressure on prices.

However, rise in Manufacturing PMI data from the US and favorable economic data from UK cushioned sharp downside.

In the Indian markets, base metals traded on a mixed note but Rupee appreciation prevented sharp gains.


Copper

LME Copper prices fell by 0.1 percent in the last trading session on the back of announcement of another round of QE tapering by the Federal Reserve in its meeting. Also, strength in the DX along with mixed global market sentiments acted as negative factors. Further, unfavorable unemployment data from the US pushed the prices lower.

However, statement by the Fed that the US economy has picked up led to brightening prospects for the red metal and cushioned sharp downside. Also, decline in LME inventories by 1 percent to 231,000 tonnes supported gains. The red metal closed at $6636/tonne on Thursday.

MCX Copper prices jumped by 1 percent and touched a high of Rs.408.5/kg before closing at Rs.406.95/kg in the last trading session.


Outlook

We expect LME Copper prices to trade on a mixed note today on the back of mixed market sentiments along with strength in the DX hat will exert downside pressure on prices. Also, estimates of weak construction data from UK will act as a negative factor.

While on the other hand, estimates of strong employment data from the US along with positive manufacturing data from Euro Zone will cushion sharp downside or even reversal in prices.

In the Indian markets, Rupee movement will provide further direction to prices.