China has instilled fears in the mind of traders currently. The heavy sell off in Indian metals continued on Monday even when it seemed that the selling was too extended to continue in the new week. China has opted for some strict measures in order to tame down inflation in property markets. The country has initiated 20 percent taxes on capital gains on home sales profits and has even asked to increase the down payment requirement to keep buyers on the back foot.
The selling pressure was also coming from the fact that $ 85 billion US spending cuts kicked in as lawmakers failed to agree on any resolution to prevent the same. The cuts are expected to bring down the GDP of US by 0.5 percent as per International Monetary Fund (IMF) estimates.
Shanghai metals declined sharply after the last week moves while London Metals that have already beaten down in last week were more silent with marginal gains. Zinc was the only metal that traded in red. LME Copper three month forwards was up by 0.66% at $ 7716 per tonne. Inventories continued to create headache for Copper as it rolled forward by another 3625 tonnes to 462400 tonnes on Monday.
In currency markets, Dollar has accentuated up its position against the Euro. The drop down in European investor confidence resulted in further moving away from Euro. The investor confidence indicator of Eurozone dropped to -10.6 in March from a reading of -3.9 in February. The greenback was trading at 1.299 against the Euro, up 0.16%. Indian Rupee remained heads down against the Dollar but even this is creating heaviness in the markets after the imposition of 0.01% CTT on commodity trades. Rupee was seen trading at 54.86, down 0.06% against the Dollar.
MCX Copper April expiry contract was down by 0.56% to Rs 428.7 per kg. The prices have tested a high of Rs 430 per kg and a low of Rs 427.2 per kg. The most active contract of Nickel was down by 0.9% to Rs 914 per kg.
On LME, Zinc forwards were down, right from early Asian trades and tested a intraday low of $ 2009 per tonne. The metal was trading at $ 2012 per tonne, down $ 6 from last week. Inventories of Zinc were down by 1750 tonnes to 1198300 tonnes but that has hardly made any difference to the metal.
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