India Infoline reported that relief rally in metals was noticed as the markets strayed away bears after positive home sales data from the US. US Dollar lost momentum making commodities priced in Dollar cheaper. This also led some position building in Copper, Nickel and Aluminum.
In US, Department of Commerce said that new home sales rose 7.3% in April to a seasonally adjusted annual rate of 323000. The Dollar index moved lower settling at 75.92 as against 76.15 on Monday. The greenback moved away from its two month highs of 1.3966, the buck settled at 1.4101.
Federal Reserve minutes for discount rate meeting released highlighted that bank directors generally noted that although the economic recovery was progressing they were cautious about the economic outlook.
Some directors reported increases in consumer and business spending; gains were also noted in the manufacturing and agricultural sectors. Labor market conditions had continued to improve modestly although many directors said unemployment was still higher than desired. The housing sector remained weak, and some directors noted that recent housing starts were lower than anticipated.
Elsewhere, International Copper Study Group report showed that Copper market registered a marginal deficit in the month ended February 2011. The markets of Copper showed a deficit of 17000 tonnes. After making seasonal adjustments the world refined copper markets showed a deficit of 9000 tonnes. Apparent Refined Copper balance showed a deficit of 60000 tonnes in January to February 2011. A seasonally adjusted deficit of 72000 tonnes was noted in January to February 2011.
MCX Copper June contract closed at INR 403 per kilogram up 0.6%. Nickel benchmark contract closed at INR 1034 per kilogram up INR 21 or 2%. Lead closed the trading at INR 112.7 per kilogram on MCX up 1.3% while Zinc was up 2.3% to settle at INR 97.8 per kilogram.
COMEX Copper July expiry contract is seen trading at USD 4.04 per pound up 3 cents. In Shanghai, Copper highest traded August contract is at CNY 67080 per tonne up CNY 960.
(Sourced from www.indiainfoline.com)
