COPPER IS LIKELY TO TRADE SIDEWAYS DURING THE MORNING SESSION
Date: 26/3/2012
Copper is likely to trade on sideways during the morning session on Monday, 26th March after huge losses during the last week. Copper is likely to find support at Rs 429.7 per kg and Rs 426 per kg and resistance at Rs 435 per kg and Rs 439.6 per kg.
Copper surged on Friday at LME capping the some of the weakest weekly losses as the rekindled concerns on Chinese demand spooked investors. The firmness in equities and euro amidst the better than expected home sales data underpinned the sentiment and led the red metal to end modest gains on Friday.
Copper amplified by 1.1% at $8378 per tonne on Friday at LME. Comex Copper surged by 1.1% or 4 cents at $3.8085 a pound compared to $3.7655 a pound traded last day. MCX Copper rose by 0.5% or Rs 2.2 at Rs 432.1 per kg and tested an intraday high at Rs 433.6 per kg and low at Rs 428.9. The contract stood just above 9-day EMA and RSI stood at 56.05.
The dollar index shed by 0.4% at 79.35 against the basket of 6 major currencies as the improved risk appetite across the global markets shrugged off the worries about china demand and favored the risky assets.
Metals were choppy during the last week ended on mixed note on Friday as the worries over the China coupled with the missed expectation on US new homes sales hammered the metals. But, the firmness in the euro and equities favored the sentiment and curbed the huge losses.
Decline in China manufacturing activity further roiled the markets. The HSBC flash purchasing manager's index, the earliest indicator of China's industrial activity, fell back to 48.1 from February's four-month high of 49.6. New orders sank to a four-month low, an expected rebound in export orders failed to emerge and new hiring slumped to a two-year low.
In the economic front, US housing data showed sales of new homes fell to 313,000 for the second consecutive month in February, a sign the market remains shaky. It missed expectations for a slight increase to 325,000.
In industrial metal market, Century Aluminum Co said on Friday it has resumed talks for a power deal with Appalachian Power, a unit of American Electric Power Co. Inc., to supply its Ravenswood, West Virginia aluminum smelter as it moves closer to restarting the idled plant.
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