Isra-Mart srl: Strong Dollar And Growing Global Economic Concerns Led The Base Metals To Tumble

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In addition to market uncertainties lurks out in the market, the slew of downbeat data regarding US employment status showed that the US economy failed to create jobs last month. This coupled with renewed fears that euro zone sovereign debt crisis is worsening and further strengthening dollar reduced the appetite for metals. Mixture of these global economic concerns and light volume trade yesterday on US labor holiday led the metals to plummet further yesterday.

The dollar index surged by 0.62 at 75.16 for the fifth consecutive day the highest in last two weeks against the basket of 6 major currencies as the investor's still finding it as a safe heaven asset amid the growing global economic worries in the market.

In the domestic market at MCX, Copper for delivery in November plunged down by 1.37% or Rs. 5.75 at Rs. 414.45 per kg with its high at Rs. 419.05 per kg. The open interest added by 2.61% to 16,408 lots indicating some short selling in the market and volume traded as of now stood at 59,302lots against 5232 lots trade last day. The contract was just below the 27-day EMA and the 14-day RSI stood at 44.08.

Nickel for delivery in September tumbled by 3.03% or Rs. 30.1 at Rs. 962.9 per kg with its high at Rs. 991.9 per kg. The open interest added heavily by 62.46% to 11502 lots indicating huge short selling in the market and volume traded stood at 37,685 lots against 2003 lots trade last day.

Aluminium eased by 1.84% or Rs. 2.05 at Rs. 109.35 per kg and Lead depreciated by 1.31% or Rs. 1.5 at Rs. 112.8 per kg. MCX Zinc weakened by 0.99% or Rs. 1 at Rs. 99.8 per kg.

At LME, the Three-month-delivery copper on the London Metal Exchange ended lower by $139, or 1.23% at $8,961 a metric ton. Copper inventories on the LME warehouse fell by 475 tonnes from previous day to close at 465600 tonnes.

Among other traded metals at LME , Lead in London down surged by 3% to $2,430 a ton and nickel fell by 2.5% to $21,050 a ton. Aluminum ended lower at $2,397a ton, down 1.7% and zinc fell by 2.61% to end at $2,162 a ton.