 "Commodities spooked by growth worries")
Base metals had a sharp falls on Thursday, due to fresh indications of slowing global economic growth, leading to weakening demand for industrial commodities.
On the benchmark London Metal Exchange (LME), industrial metals fell by two to 5.36 per cent. Zinc had the highest fall, followed by nickel at 5.08 per cent, to a multi-year low.
The International Monetary Fund (IMF) last week forecast the world economy to have 3.3 per cent growth this year, slower than its May estimate of 3.7 per cent. It also cut the forecast for Germany’s growth from 1.9 to 1.4 per cent.
“The decline can be attributed to the macro economic factors which indicate slower than estimated growth in the global economy. Base metals’ consumption is directly proportional to economic growth,” said Gnanasekar Thiagarajan, Director, Commtrendz Research.
Copper prices are trading lower by one per cent, towards its lowest since May, with mounting concerns over global growth also stoking selling across other metals. Also, US retail sales declined in September as consumers pulled back on spending for a range of items, along with gain of two per cent in inventory in LME-registered warehouses.
Oil prices fell as global economic worries deepened this week. China’s consumer inflation declined to near five-year lows and US producer prices declined for the first time in a year. The International Energy Agency also cut its global oil demand growth forecast for 2015. On the Multi Commodity Exchange, crude prices are trading lower by 2.7 per cent, at Rs 4,984/bbl.
“Crude oil prices are expected to continue a downward move. Ample supplies in the US and start of refinery maintenance will drag prices down further. Also, copper might move further down on estimates of weak US manufacturing data, along with concerns on global growth. However, expectations of favourable industrial production data from the US in the evening session will restrict a sharp downside,” said Prathamesh Mallya, senior researcher at Angel Commodities.
WTI crude oil fell 1.8 per cent to $80.29 a barrel and Brent slumped 1.3 per cent to $82.72 a barrel, the lowest since November 23, 2010. The Bloomberg Commodity Index dropped 0.3 per cent to 116.6041, the lowest since July 2009.
The dollar rose against the euro after weakening 1.4 per cent on Wednesday, the steepest decline since July 2013.
Meanwhile, European equity markets weakened on worries over the global economy’s strength, sending investors in search for assets perceived as safer. Investors were spooked by a drop in US retail sales in September, while producer prices dropped for the first time in more than a year. Sluggish US data added to concerns voiced by some Federal Reserve policymakers about the broader economic outlook, which could delay a rise in interest rates.
On the benchmark London Metal Exchange (LME), industrial metals fell by two to 5.36 per cent. Zinc had the highest fall, followed by nickel at 5.08 per cent, to a multi-year low.
The International Monetary Fund (IMF) last week forecast the world economy to have 3.3 per cent growth this year, slower than its May estimate of 3.7 per cent. It also cut the forecast for Germany’s growth from 1.9 to 1.4 per cent.
“The decline can be attributed to the macro economic factors which indicate slower than estimated growth in the global economy. Base metals’ consumption is directly proportional to economic growth,” said Gnanasekar Thiagarajan, Director, Commtrendz Research.
Copper prices are trading lower by one per cent, towards its lowest since May, with mounting concerns over global growth also stoking selling across other metals. Also, US retail sales declined in September as consumers pulled back on spending for a range of items, along with gain of two per cent in inventory in LME-registered warehouses.
Oil prices fell as global economic worries deepened this week. China’s consumer inflation declined to near five-year lows and US producer prices declined for the first time in a year. The International Energy Agency also cut its global oil demand growth forecast for 2015. On the Multi Commodity Exchange, crude prices are trading lower by 2.7 per cent, at Rs 4,984/bbl.
“Crude oil prices are expected to continue a downward move. Ample supplies in the US and start of refinery maintenance will drag prices down further. Also, copper might move further down on estimates of weak US manufacturing data, along with concerns on global growth. However, expectations of favourable industrial production data from the US in the evening session will restrict a sharp downside,” said Prathamesh Mallya, senior researcher at Angel Commodities.
WTI crude oil fell 1.8 per cent to $80.29 a barrel and Brent slumped 1.3 per cent to $82.72 a barrel, the lowest since November 23, 2010. The Bloomberg Commodity Index dropped 0.3 per cent to 116.6041, the lowest since July 2009.
The dollar rose against the euro after weakening 1.4 per cent on Wednesday, the steepest decline since July 2013.
Meanwhile, European equity markets weakened on worries over the global economy’s strength, sending investors in search for assets perceived as safer. Investors were spooked by a drop in US retail sales in September, while producer prices dropped for the first time in more than a year. Sluggish US data added to concerns voiced by some Federal Reserve policymakers about the broader economic outlook, which could delay a rise in interest rates.