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Softening Dollar And Hopes On Fed Symposium Led Metals To Accentuate

Amidst deteriorating economic outlook lurks in the market, investor's awaited for the outcome of Fed meeting to be held later today which may signal more monetary easing for economic growth recovery. Weedy dollar conspired with the focus on the US GDP data to be released today led the metals to trade sideways during the evening session.
The dollar index slumped by 0.32% at 74 against the basket of 6 major currencies before tentative economic data and Fed talks at Jackson Hole, Wyoming today.
In the domestic market at MCX, Copper for delivery in August tested a high of Rs 419.15 per kg and low of Rs 412 per kg in intraday and is now trading at Rs 418.15 per kg, up by 0.55% or Rs 2.3. The open interest added slightly by 1.31% to 12,908 lots and volume traded as of now stood at 51,852 lots against 90,639 lots traded last day. The contract was between 50-day and 100-day EMA and the RSI stood at 58.09
Nickel was finding much vitality in the market compared to other metals and surged by 1.21% or Rs 11.7 at Rs 979.7 per kg and was trading between 9-day and 18-day EMA with RSI at 46.57.
MCX Aluminium was trading flat at Rs 108.05 per kg. MCX Zinc was trading flat at Rs 102.15 per kg and Lead was strengthening by 1.35% or Rs 1.5 at Rs 112.9 per kg.
Copper futures November contract in Shanghai settled at 67190 yuan per tonne, up 390 yuan or 0.58% higher. Comex Copper futures most active September contract was trading at $4.108 a pound, up by 0.71% or just 3 cents compared to the previous day that ended at $4.079 a pound

Review

It was a sluggish day of trade for the Indian markets, losing about one and half a percent after witnessing a smart move in previous session. The fading optimism about global recovery appeared on the regional stock markets and while some of the Asian markets could not manage a close in green even after a positive start, the domestic markets plunged despite making a valiant effort of recovery in early trade. Once the markets slipped into red in the late morning trade, the mood turned bearish and the buying moderated with blue chips suffering some profit booking after the previous session’s gains. A small spurt was seen once the European markets started in green but that was short lived and benchmarks succumbed to profit taking, once again sliding below their crucial support level of 4900 Nifty and 16400 Sensex. The broader indices however tried hard to support the markets but in latter half they too lost their momentum and lost about over half a percent for the day. Apart from the heavyweights, IT sector witnessed profit booking since beginning and all the top gainers of previous session suffered selling pressure. Auto sector stocks got battered today on concern of slowing demand and all the constituents of the gauge on the BSE ended in red with Tata Motors that has maximum exposure to the European markets losing the most, touching its fresh 52 week low. The selling pressure intensified in last hour and the most defensive sector FMCG too wasn’t spared of it. The banking sector also remained in the laggards list with all its constituents closing in red and the heavy weight SBI touching fresh 52 week low. There were some individual winners otherwise the last hour rout inundated the entire space and the benchmarks reversed all their gains garnered in last two sessions, closing near the lowest points of the day.

On the global front, though the US markets surged most in last two weeks on optimism that Central bankers meeting this weekend in Jackson Hole, Wyoming will bring some cheers to the faltering economic recovery, however the Asian markets made a mixed start and finally ended lower as Moody's Investors Service slashed Japan's credit rating by one-notch to Aa3 citing concerns over growth prospects. Meanwhile, Japan unveiled a $100 billion effort to help companies cope with a surging yen. The European markets though made a flat start but turned firm despite the report that UBS AG will cut 5 percent of its workforce that brings to more than 40,000 the number of jobs cut by European banks in the past month as the region’s worsening sovereign debt crisis crimps trading revenue.