ALUMINIUM which finds a major use in transportation and packaging sector showed a good rally this week following some physical and investment demand. Aluminium for three month delivery on London Metal Exchange (LME) was up 8.5% against previous week and closed at $1567 per tonne this week .
On MCX the June contract closed up 8% at Rs 73.3 per kg. Kunal Shah, assistant vice president research at Nirmal Bang Commodities is bullish for the commodity in the medium term. "Most of the commodities are trading above their 200 day moving average prices. For aluminium the 200 day moving average is $1770 and so there is a further room for upside," he said.
But Reena Walia, research analyst from Angel Commodities feels that there are no fundamentals to justify this kind of rally and one can see some sell off from these high levels. " Revival in demand for aluminium is expected only by the second half of this year," she said. She added that although economic data is showing some signs of improvement there could be a possibility of a surge in the dollar that will cap the upside. After showing a decline in early part of the week, dollar later strengthened and pressurised the base metal counter.
A weak dollar and positive manufacturing data from China led to a rally in base metals pack including aluminium earlier this week. China's purchasing managers' index (PMI) at 53.1 marked the third consecutive month of expansion of activity in manufacturing which triggered positive sentiments for base metal demand especially copper. Even the US manufacturing sector expanded at a slightly more than expected pace in May.
Amunium was further supported by the LME warehouse deliveries that jumper by 15% to 81,375 metric tonnes which was the highest since April 17. However analysts feel that the revival of auto sector will take some time and since aluminium finds application in this industry it had been affected.
The US auto market shrank almost 35% in May following the bankruptcy of auto companies and idling capacities. According to Ms Walia though the US has witnessed a rise in consumer confidence, the translation of this effect into the US auto sector still remains to be seen.
nidhi.sharma@timesgroup.com
Precious metals
tumble on global cues
MUMBAI: Precious metals tumbled on the bullion market here today on fresh stockists offerings on the back of overnight fall in the New York market. Gold and silver futures fell sharply in New York as better-than-expected employment report boosted hopes for an economic recovery which made precious metals less attractive investment amid firmness in equity markets. Gold for June delivery fell by $19.50 an ounce to $961.70 on the Comex Division of the New York Mercantile Exchange and July silver also dropped by 50.7 cents to $15.388 an ounce on Friday. Moving to the domestic market, standard gold (99.5 purity) fell by Rs 215 per 10 grams to settle the day at Rs 14,665 from Rs 14,880 on Friday. — PTI
On MCX the June contract closed up 8% at Rs 73.3 per kg. Kunal Shah, assistant vice president research at Nirmal Bang Commodities is bullish for the commodity in the medium term. "Most of the commodities are trading above their 200 day moving average prices. For aluminium the 200 day moving average is $1770 and so there is a further room for upside," he said.
But Reena Walia, research analyst from Angel Commodities feels that there are no fundamentals to justify this kind of rally and one can see some sell off from these high levels. " Revival in demand for aluminium is expected only by the second half of this year," she said. She added that although economic data is showing some signs of improvement there could be a possibility of a surge in the dollar that will cap the upside. After showing a decline in early part of the week, dollar later strengthened and pressurised the base metal counter.
A weak dollar and positive manufacturing data from China led to a rally in base metals pack including aluminium earlier this week. China's purchasing managers' index (PMI) at 53.1 marked the third consecutive month of expansion of activity in manufacturing which triggered positive sentiments for base metal demand especially copper. Even the US manufacturing sector expanded at a slightly more than expected pace in May.
Amunium was further supported by the LME warehouse deliveries that jumper by 15% to 81,375 metric tonnes which was the highest since April 17. However analysts feel that the revival of auto sector will take some time and since aluminium finds application in this industry it had been affected.
The US auto market shrank almost 35% in May following the bankruptcy of auto companies and idling capacities. According to Ms Walia though the US has witnessed a rise in consumer confidence, the translation of this effect into the US auto sector still remains to be seen.
nidhi.sharma@timesgroup.com
Precious metals
tumble on global cues
MUMBAI: Precious metals tumbled on the bullion market here today on fresh stockists offerings on the back of overnight fall in the New York market. Gold and silver futures fell sharply in New York as better-than-expected employment report boosted hopes for an economic recovery which made precious metals less attractive investment amid firmness in equity markets. Gold for June delivery fell by $19.50 an ounce to $961.70 on the Comex Division of the New York Mercantile Exchange and July silver also dropped by 50.7 cents to $15.388 an ounce on Friday. Moving to the domestic market, standard gold (99.5 purity) fell by Rs 215 per 10 grams to settle the day at Rs 14,665 from Rs 14,880 on Friday. — PTI
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