BSE Metal index down 1.6% as Commodity prices show further weakness

Copper prices touched a 2 month low of $6,580 per tonne over concerns of slowdown of Chinese infrastructure spending. Build up of copper inventories was also the cause for further bearishness. Copper inventories at LME warehouses rose from 10,650 tonnes to 192,550 tonnes. On the MCX, Zinc and aluminum prices were down 0.55% and 0.38% respectively. However, copper prices traded higher by 0.7%.

As per an economic survey, Chinese fixed-asset investment in infrastructure is estimated to grow at 12% next year against 20% in the first 10 months of 2017. China is stepping up efforts to reduce overcapacity in industry, which is feared to reduce demand for base metals going forward.

Metal stocks continued their decline from yesterday. Vedanta and Hindustan Zinc lost 2.8% each with Hindalco losing 2.9%. Steel stocks were less affected with JSW Steel, SAIL and Tata Steel down by 1.87%, 2.24% and 1.94% respectively.

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