CAU­TION: Fur­ther stock ral­lies not ex­pected

Financial Chronicle - - RISING METTAL STOCKS -

THE base metal com­plex that was on a win­ning run till last week seems to be ex­hausted and prices are cur­rently go­ing through a cor­rec­tive phase. In the in­ter­na­tional mar­ket alu­minium, copper and zinc are the top gain­ers fol­lowed by nickel and lead. Since the start of 2017, alu­minium, copper and zinc prices in the Lon­don Metal Ex­change gained more than 20 per cent, while nickel and lead gained 17.3 per cent and 12.3 per cent re­spec­tively. LME alu­minium is now trad­ing near four-and-a-half year highs while copper is at its high­est level since Septem­ber 2014. Hope of slow but steady Chi­nese and global man­u­fac­tur­ing growth, along with a weak dol­lar have sup­ported prices. In the do­mes­tic fu­tures mar­ket, prices ral­lied in line with in­ter­na­tional coun­ter­parts, but gains were limited due to a strong ru­pee.

Lat­est im­port data from the world’s top metal con­sumer, China, showed a stronger than ex­pected growth in Au­gust which re­in­forced hopes of a healthy pace of a grow­ing econ­omy de­spite tighter pol­icy. As per the data, im­ports of me­tals have grown 13.3 per cent in Au­gust against a fore­cast of 10 per cent which sug­gests higher than ex­pected do­mes­tic de­mand. Mean­while, ex­port growth has soft­ened since ship­ments fells in Fe­bru­ary.

GUEST COL­UMN HAREESH V RE­SEARCH HEAD GEOFIN COMTRADE LTD.

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