Base metals declined on the MCX today, tracking weakening trend in the overseas market after Eurozone concerns soared once again.
Weak economic data from China also dragged base metals lower today. China is the biggest importer and consumer of most base metals.
However, a reserve ratio cut by Chinese Central Bank freed $63.4 billion into the markets, which had pulled the metals into the green zone intraday, before reigning economic concerns pulled base metals lower again. Base metals move in tandem with the health of the economy.
According to data released by the National Bureau of Statistics, Chinese copper production also declined by 3.7% to 491,000 tonne in April from 510,000 tonne March. Production of Aluminium also dropped 2% to 1.53 million tonne in April from 1.57 million tonne in March.
Concerns over limited supply of metals in the physical markets helped in capping the upside in base metals today, led by the most-active copper contract.
Eurozone concerns soared today after continuing woes over the debt-crisis pulled the euro down to a four-month low against the US dollar. Bond yields for Euronations, including Spain and Italy also soared, trigerring a major sell-off in risky commodities in the international markets.
In the domestic market, base metals declined nearly 0.50-1% from their previous closes, dragged by subdued demand in the spot market and firm rupee against the dollar. A firm rupee would make dollar-denominated commodities cheaper to import.
Most active copper contract on the MCX was down 1.24% at Rs 426.65, followed by lead, which shed 0.81% to trade at 109.55 on the domestic bourse today.
Zinc was trading at Rs 103.35, down 0.58% and nickel was down 0.38% at Rs 916.60 today.
