Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (October 17, 2012)

Contributed by Angel Broking

The base metals pack traded on a mixed note in the yesterday's trading session on the back of mixed LME inventories.

However, sharp downside in the prices was cushioned as a result of rise in risk a ppetite in the global market sentiments along with weakness in the DX.

In the Indian markets, appreciation in the Rupee added further downside pressure on the prices.

Copper

Copper, the leader of the base metals complex gained 0.2 percent on the back of favourable US industrial output and after Moody's investor Servi ce kept Spain investment grade at Baa3 one level above junk easing sovereign debt crisis. There were fears that the rating could b e cut to the junk status. This created positive global market sentiments and weakened US Dollar Index thus supporting an upside in the red metal prices. However, sharp rise in e prices were capped on the back of strength in the DX.

However, dec line in LME Copper inventories by 0.7 percent also added to the gains in the copper prices. LME Copper stocks stood at 210,725 tonnes. The red metal touched an intra-day high $8,181/tonne and closed at $8,141.75/tonne in yesterday's session.

On the domestic front, prices ended on a flat note and closed at Rs.434.4/kg after touching a high of Rs.436/kg on Tuesday. Depreciation in the Indian rupee also supported an upside in the copper prices on MCX.

Outlook

Base metal prices in today's session are expected to trade on a positive note on the back of easing of debt concerns of the Euro zone as Spain is expected to seek for a bailout and German leaders supporting the move is likely to create positive sentiments. Additionally, weakness in the DX will also act a as supportive factor for the base metals. However, in the domestic markets appreciation in the Indian rupee will cap sharp gains in the prices of base metals on MCX.