Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (October 30, 2012)

Contributed by Angel Broking

The base metals pack traded on a negative note on the back of rise in risk aversio n in the global markets along with strength in the DX. Additionally, rise in LME inventories also exerted downside pressure on the prices.

In the Indian markets depreciation in the Rupee cushioned sharp fall in the prices.

Copper

Copper, the leader of the base metals complex fell 1.3 percent on the back of rise in the risk aversion amongst market participants amidst worries over possible sharp tightening in the Federal budget as Fiscal cliff is nearing to an end. Further, weak corporate earnings also created bearish market sentiments overshadowing positive US GDP data in the last week. Strength in the DX also acted as bearish factor for the copper prices.

Rise in LME Copper inventories by 9.4 percent also exerted downside pressures on the Copper prices on Monday. LME Copper stocks stood at 2,40,450 tonnes. The red metal touched an intra-day low $7,670/to nne and closed at $7,724/tonne on Monday.

On the domestic front, prices declined 1 percent and closed at Rs.420.90/kg after touching a weekly low of Rs.418.90 /kg. However, sharp downside in the prices was cushioned due to depreciation in the Indian rupee.

Outlook

From the intraday perspective base metal prices are expected to trade on a positive note due to mixed global market sentiments. Continued debt concerns of the Euro zone with uncertainty over the Spain and Greece bailout. Doubts amongst market participants that positive data from the US economy might prompt US Federal Reserve to adjust stimulus measures along with worries of fiscal cliff issues might exert downside pressure on the base metals. Depreciation in the Rupee will cushion sharp fall in the base metal prices on MCX.