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India Base Metals:Down in line with equities on US-China trade worry

Wednesday, Sep 25

 

By Shrea Paul

 

Mumbai – Futures contract of base metals on Multi Commodity Exchange of India fell tracking similar trend in most contracts on London Metal Exchange, which was in line with the global equities. Risk aversion was prompted by an impeachment enquiry against US President Donald Trump as well as due to US-China trade tensions.

 

A firm dollar against a basket of other major currencies also weighed on the global prices of base metals. 

 

On Tuesday, Democrats in the US House of Representatives announced an impeachment enquiry against US President Donald Trump. They accused him of attempting to damage the reputation of Democratic candidate Joe Biden ahead of the 2020 elections.  

 

On the US-China trade war front, Donald Trump criticised trade policies of China and said he would not accept a "bad deal" from them, leading to fresh fear over an escalation in the trade war. 

 

"It's not a deal that's going to get done quickly," Trump said at the United Nations General Assembly on Tuesday.

 

"The comments from Trump come just weeks before top negotiators from both sides are due to meet in Washington, dampening any optimism of an interim trade deal being struck and sending a wave of risk-off through the markets," as per a report by metalbulletin.com.

 

Comments from People's Bank of China Governor Yi Gang that another monetary stimulus to support the economy was unlikely, which was also a negative for base metal prices. 

 

Additionally, subdued demand at higher prices from the stainless steel sector weighed on Nickel futures. 

 

At 1753 IST, on MCX, futures contracts of:
–Sep aluminium was at 135.7 rupees a kg, down 0.3%
–Sep copper was at 438.7 rupees a kg, down 0.7%
–Sep lead was at 153.9 rupees a kg, down 0.1%
–Sep nickel was at 1,231.0 rupees a kg, down 0.2%
–Sep zinc was at 178.9 rupees a kg, down 0.6%

 

OUTLOOK

The September copper contract on MCX is seen trading at 435.0-447.0 rupees per kg, and nickel at 1,210.0-1,255.0 rupees, while the September zinc contract is seen at 176.5-182.5 rupees a kg, Angel Broking said in a note.  End

 

US$1 = 71.03 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Mainak Moitra

 

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