The base metal complex carried forward a bullish trend on the previous session- gains instilled by the steady equity market and losses of dollar against the overseas currencies. Gains in copper and aluminium were supported by fall in the LME stockpiles by 1,826 tons and 10,500 tons

During the day, higher gains on LME were discounted by strong rupee appreciation after the Fitch Ratings upgraded the outlook on India's long-term local currency issuer default rating to "stable" from "negative”

Moreover, the rise in Euro-zone industrial production to 0.80%, surpassing expectations of 0.40% although low from the prior of 1.60% was also a contributing factor for gains in euro against the greenback and keep the equities upbeat

The optimistic statements by Fed officials and ECB president suggested that the downfall is overdone and prices tend to recover after falling heavily since the start of 2010 Chinese market would remain closed from 14th to 16th June due to a regional holiday

OUTLOOK

Greece’s bonds credit rating are also decelerated to non-investment grade, or junk by the Moody’s Investors Service after Standard & Poor’s cut the ratings earlier. This has caused Euro to weaken against the Dollar. However, the ratings cut was something obvious to happen and thus chances of higher impact could be ruled out

Day ahead, market awaits for a host of important data releases from the US, Germany and Euro-zone. The June month ZEW Survey of Economic Sentiment for Germany is expecting a decline to 42 levels as compare to prior 45.8. However, the figures for Euro-zone are improving to 39 from prior of 37.6. Coming on the US front, the import price index for May month is falling in negative of 1.30% against 0.90% growth in the penultimate month. The Empire manufacturing for June is nudging up to 20 against 19.11. Lately, the Net long –term TIC flows for April month are falling to $30 Billion as compares to March’s inflows of $140.5 Billion. Overall the data releases are mixed, thus the actual would provide clear directions

The Asian equities opened mixed following the sluggish downward closing on the Wall Street, the previous day. Any further rise / fall in the global equity market would help judge the intraday directions

The dollar index, a performance track against the majors, opened 86.736, ticked intraday high of 86.769, now up by 0.15 percent at 86.644. However, despite the recouping dollar index, the basket majors also showcase some gains against the Greenback

We from KCTL expect metals to instill a gap downward opening as the electronic session at LME runs considerable low, Copper low by $27/tons and Nickel by $317/tons. However the rupee depreciation could help prevent some losses on the MCX front. Session is expected to remain low in the Asian hours, while the European equities would give a fresh trend to prices. Evening session would remain volatile on account of data releases. Overall market is anticipating a jittery session ahead, impulse by the host of economic data releases and reaction to the Greece event

Courtesy: Karvy Commtrade Ltd.

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