Base metals on MCX were positive On Thursday, taking cues from London Metal Exchange, where supportive US new homes sales and durable goods data for February triggered buying in the complex.
Orders for durable goods and sales of new homes rose unexpectedly last month, fuelling hopes the economic downturn in the US may be moderating, they said. Meanwhile, positive global equity markets also pushed up metal prices On Thursday, they said. “The data (US new homes sales and durable goods), released Wednesday, has continued to have an impact on the complex On Thursday,” said Prakash Prabhu, analyst at Greenback Commodities. Booking for goods such as machinery and computers rose 3.4 per cent in February, the biggest gain in more than a year and the first in seven months.
Also, new home sales data jumped 4.7 per cent from a record low in January.
Optimism in China regarding investment in the infrastructure sector despite the ongoing global financial turmoil also lent support to the non-ferrous metals On Thursday, analysts said.
China is the world’s largest consumer and producer of most base metals. On MCX, aluminium, copper, and lead prices edged up over 2%, while nickel futures moved up over 1 per cent. Zinc shot up over 3 per cent on the bourse.
At 5.30 PM, MCX April copper contract was at Rs 206.45 per kg, up 2.56 per cent from Wednesday’s close.
Later On Thursday, the contract is expected to find support at Rs 199.80 and face resistance at Rs 208, said P Samson, analyst at Angel Commodities.
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Tin futures were also up marginally.
At 5:31PM, MCX March tin contract was at 535 rupees per 1 kg, up 0.05 per cent from Wednesday’s close.
Most analysts are of the view that the complex will continue to move northwards in the rest of the session. The market is also eyeing key US economic data such as weekly unemployment claims and October-December gross domestic product data, scheduled to be released later On Thursday.
The unemployment data is expected to be neutral for the complex, while the GDP data may be slightly bearish, analysts said.
“Though the GDP data may try to place pressure on metals, the China factor will continue to support the complex,” said a Mumbai-based analyst.