Base Metals:

Base Metals: Base metals pack traded lower in the last week at Multi Commodities Exchange (MCX) and breached 8 week’s low on the back of slow down of China’s economy and poor exports data from Japan. Japan‘s export was down by 10.3 percent in the month of September from a year earlier, the most since the aftermath of last year’s earthquake. Caterpillar Inc., the largest maker of construction and mining equipment forecast sales growth at the slowest in four years, fanning concern that a global slowdown may sap demand for the metals. Further, the Spanish economy contracted for a fifth quarter in the three months through September, adding pressure on Spain to seek more European aid. Moody’s Investors Service, a week after deciding against cutting Spain’s credit-rating to below investment grade, lowered Catalonia and four other Spanish regions. Additionally, appreciation of Indian rupee against US dollar also added bearish market sentiments. Price movement in the last week: MCX November Copper prices opened the week at Rs 434.35/kg, traded lower and touched a low of Rs 422.10/kg and finally closed at Rs 423.65/Kg (Thursday, October 25, 2012) with a loss of Rs 11.40/kg (down 2.62%) as compared with previous week’s close. Outlook for this week: Base metals are expected to trade lower on concerns of slowing growth in China and Japan. Further, there is no specific plan to resolve euro zone debt crisis. Additionally, increased in inventories of red metals at LME warehouses is negative for base metal prices. MCX November Copper shall find a support at 416/408 levels and resistance 430/435 levels. Recommendation for this week: Sell MCX November Copper between 428-430, SL-436, Target 416/409.