MUMBAI: A technical snag at the Wall Street put a dent on commodity counters which were already suffering a setback from the global economic scenario. Crude oil and base metal counters were the worst sufferers from the prevailing conditions.
Contagion effect of Greek like situation looking to spread across Euro region has been instrumental in pushing commodity counters lower. Consequent to growing uncertainty in the region, Euro – the currency to 16-member country union – has slipped to 14-month low against US dollar. A stronger US dollar has always spelt a negative for commodity counters.
Slide in crude oil prices is a big testimony to adverse impact of US dollar strength on commodity prices. US crude oil futures stood little changed above $77 a barrel after falling 3.6% a day earlier on growing fears that the Greek debt crisis could engulf other economies and hurt oil demand.
NYMEX crude for June delivery was up 14 cents at $77.24 a barrel, after settling down $2.86 at $77.11 a day earlier, the lowest close since mid-February, as the US dollar rose and other risk assets retreated.
Oil has fallen more than 10% this week, its worst week since the start of 2009, punished both by anxiety over the euro zone as well as data showing rising crude inventories as a demand rebound fails to materialise.
The crisis of confidence in euro-zone economies and the latest US economic data stoked further worries that global energy demand could be hard hit, just as signs of recovery are emerging, particularly in the , the world's largest energy consumer.
's GDP is expected to grow an annual 10.7% in the second quarter, while the consumer price index is expected to rise 4.2%, a government think tank said in a report published earlier in the day.
Gold edged down as some investors sold after the metal rose toward an all-time high the previous day on the euro-zone debt crisis and a suspected trading error that saw stocks plunge 9% before recovering some lost ground.
Spot gold was at $1,201.50 an ounce, $2.90 from New York’s notional close on Thursday, when it jumped 3% to its highest since December 2009 at $1,210.35 an ounce. Gold struck record at $1,226.10 five months ago. Gold priced in euro and sterling held near Thursday's record.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at a record high of 1,185.79 tonnes as of May 6, up from 1,166.00 tonnes in the previous business day.
Base metals prices fell in early trades, dropping around 1% in London after a suspected trading error sparked Wall Street's biggest ever sell off and highlighted the fragility of global investor sentiment.
Three-month copper on the London Metal Exchange (LME) fell $70 to $6,815, after a modest $9 gain on Thursday. LME aluminum dropped $20 to $2,075 a tonne. The market dipped as low as $2,065, just $5 off the previous session near three-month low.
LME nickel fell 2.6% to $21,325. Nickel has been the most volatile metal in recent days trading in ranges in excess of $2,000 -- about 10% of its value.
Domestic commodity counters traded softer tracking overseas markets. MCX crude oil futures for May settlement moved between Rs 3,550 and Rs 3,532 before retracing to current level of Rs 3,534 per barrel, down 0.3%.
Precious metal counters edge higher, following the sharp gains in overseas markets. MCX Gold for June settlement contract last quoted at Rs 17,865 per 10 grams after moving between Rs 17,871 and Rs 16,785 per 10 gram. MCX Silver July settlement contract added 0.4% to trade at Rs 27,559 per kg, after having opened the session at Rs 27,521.
Base metal counters extended previous day losses tracking global metal prices. MCX copper for June settlement was last trading 0.9% lower at Rs 312.00 per kg. MCX zinc May contract was trading 1.5% lower at Rs 93.80 per kg.
