Risk Appetite Continues Ahead Of Greece Austerity Plan
Base metals were trading in higher range around mid morning at MCX on Wednesday, 29 June 2011, as investors are optimistic that Greece's parliament will approve an austerity plan later in the day, underpinning sentiments for industrial commodities. Also supporting the surge was Japan's industrial production that gained at a fastest pace in more than 50 years.
Weakening US dollar against major currency basket underpinned the buying sentiments further. Greenback fell against the euro and other majors on expectations that Greece would approve an austerity plan to secure financial aid and avoid a debt default.
Euro sentiment was also buoyed by hawkish comment by European Central Bank President Jean-Claude Trichet. He said that policymakers were in “strong vigilance mode”, boosting expectations that the ECB would raise interest rate again next month.
In the currency front, the Dollar Index, benchmark measures of the performance of the US Dollar against a basket of 6 major currencies, was 3.9% lower at 74.99 around midday on Wednesday.
Greek Prime Minister George Papandreou's 78 billion-euro ($111 billion) plan to cut spending and sell assets is set for a vote in parliament tomorrow. Lawmakers also need to pass an implementation law, which provides the technical details of how the five-year plan will be applied, by June 30.
Around mid morning at the Multi Commodity Exchange (MCX) on Wednesday, 29 June 2011, copper for delivery in June was Rs. 407.35 per kg, up by 0.25% or Rs. 1. Copper is trading in the range of high at Rs. 407.75 per kg and low at Rs. 406.80 per kg.
Also at MCX, Aluminium was trading at Rs. 112.25 per kg down by 0.04% or Rs. 0.05 per kg. On the other side, Lead was trading up by 0.3% or Rs. 0.35, at Rs. 115.95 per kg, Zinc fell down by 0.15% or Rs. 0.15, at Rs. 101 per kg and Nickel was trading up by 0.3% or Rs. 3.4, at Rs. 1020.6
At the SHFE on Wednesday, 29 June 2011, Copper futures for most active August contract was trading at 67980 yuan per tonne, up 750 yuan or 1.12% lower. Shanghai warrants of Copper fell by 175 tonnes to 20680 tonnes.
At Comex, the Copper futures for most active July contract was trading up by 0.02 cent or 0.45% at $4.1105 a pound on Wednesday, 29 June 2011.
