Here is how SMC Global expects commodities to fare today.
Out of the total deliveries of metal, aluminium accounted for 30,771 tonnes, copper 24,852.50 tonnes, lead 10,517 tonnes, nickel 3,646.50 tonnes and zinc 37,027 tonnes after completion of their August contract delivery cycle.
Historically, Chinese demand has shown cascading effect on Indian metal companies. After the bout of strong demand in 2009 from China, the Nifty Metal index had more than tripled to 4800 in March 2010 within a year.
Metal companies such as Vedanta, NMDC, Hindalco, JSW Steel, Jindal Steel, NALCO and Hindustan Copper are expected to benefit from the current trend in the Chinese demand. Steel companies such as JSW Steel, Jindal Steel and Tata Steel have reported a strong jump in exports at over 50% of total sales in the first quarter largely due to upbeat demand from China.
What we saw over the past two weeks is a sharp mean reversion. The markets, in general, were overextended and they moved towards their nearest moving averages (MA) for support, which is a usual phenomenon. Only when they drop below the 50-period MA, will it become a matter of concern.
The Nifty Metal index was trading 0.2 per cent down at 2446.5.
According to the report, a severe dent in domestic demand for metals is anticipated and it will take until at least 2022-2023 to return to pre-pandemic levels.
The Nifty Metal index was trading 0.73 per cent up at 2438.2.
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