Base Metals
Base metals on the LME traded lower yesterday as victory for the “no” vote in Greece’s referendum on Sunday has prolonged the uncertainty in global markets after Greeks overwhelmingly voted against their international creditors’ conditions for further bailout aid, increasing uncertainty about Greece’s future in the euro zone.
Also, turmoil in Chinese stocks after the government over the weekend halted all new initial public offerings along with strength in the DX exerted pressure on prices.
On the MCX, all the base metal prices traded on a negative note in line with international markets.
Copper
LME Copper prices plunged by 2.9 percent yesterday and touched a five-month low on Monday as Greece resoundingly rejected conditions of a rescue package from creditors on Sunday, raising fears of a penultimate Grexit from the Euro Zone.
Another major concern for the red metal was China’s decision to suspend new stock sales and establish a market stabilization fund aimed at fighting off the worst equities selloff in years. In addition, Chinese stimulus measures have failed to revive the flagging economy.
MCX copper declined by 3.4 percent to close at Rs.357.3/kg in the last session despite Rupee depreciation.
Outlook
We expect LME Copper prices to trade lower as investors across the globe will be wary ahead of the Euro group meeting. Also, hedge funds and money managers increased their net short or sell positions in copper in the last week ended June 30. Further, weakness in the Chinese economy and emergency selling in stocks coupled with strength in the DX will act as negative factors.
On the MCX, Copper prices are expected to trade lower taking cues from international markets.
Contributed by Angel Broking
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