Aluminium on MCX settled up 2.61% at 108.30 amid weakness in dollar as LME aluminium ended up 3.1 percent at $1,633, its highest since August 31. Also sentiments improved and traders are buying metals on optimistic outlook for demand in China after recent data pointed to a pickup in the construction market. Support also been seen after dollar dropped against major currency after the conclusion of its September meeting on Wednesday, the US Federal Open Committee (FOMC) kept the Federal Funds rate unchanged at 0.25-0.5 percent as widely expected but laid down the groundwork for an increase in the coming months.
The FOMC vote for September was spilt – three FOMC members dissented, preferring to raise rates now. While upside was capped after the update from the Organisation for Economic Cooperation and Development warned that global economic growth will flounder this year and next because of slowing trade growth. Also expected to weigh on metals is weak demand growth in China, which consumes nearly half of all industrial metals produced. In other central bank news, the Bank of Japan shifted its strategy. Although it kept interest rates unchanged, the Japanese central bank said it would switch from bond-buying to targeting long-term interest rates.
While from China Chinese Premier Li Keqiang said on Wednesday that China would promote economic development by opening up its economy more widely as experience showed closed door policies only brought stagnation. Also Technically market is under short covering as market has witnessed drop in open interest by -35.86% to settled at 3234 while prices up 2.75 rupee, now Aluminium is getting support at 106.6 and below same could see a test of 104.9 level, and resistance is now likely to be seen at 109.2, a move above could see prices testing 110.1.
--Aluminium trading range for the day is 104.9-110.1.
--Aluminium gains amid weakness in dollar as LME aluminium ended up 3.1 percent at $1,633, its highest since August 31.
--Japanese manufacturing activity expanded for the first time in seven months in September, a preliminary survey showed.
--Aluminum daily stocks at Shanghai exchange came down by 401 tonnes.
Courtesy: Kedia Commodities