Bullish Trend In Nickel On Hopes Of Rising Exports

Nickel trading range for the day is 941.93-945. The market is looking to take support at 942.6, a break below could see a test of 941.9 and resistance is now likely to be seen at 944.3, and a move above could see prices testing 945.3. In yesterday's trading session, nickel has touched the low of 943 after opening at 944.7, and finally settled at 943.2.

New Indonesian taxes on metals and curbs on raw mineral shipments are likely to hit exports of nickel and bauxite to China and push ore prices higher on world markets. First nickel reports an 87% increase in first quarter production at Lockerby, affirms full year production and cost guidance.

Aluminium trading range for the day is 109.65-110.15. Market is looking to take support at 109.8, and a break below could see a test of 109.7 and resistance is now likely to be seen at 110, a move above could see prices testing 110.2. In yesterday's trading session aluminium has touched the low of 109.8 after opening at 110, and finally settled at 109.85.

Aluminium weekly stocks at Shanghai exchange came up by 2149 tonnes. Aluminium settled down as market risk appetite was depressed by the worse-than-expected nonfarm payrolls.

Base Metals Perform Weakly At MCX, Crude Oil Declines

India’s Financial Minister Pranab Mukherjee stated that the controversial General Anti-Avoidance Rule (GAAR) provisions on taxations for foreign investors will be postponed by one year until fiscal 2013/14 and increased the load of proving tax avoidance will lie with the authorities instead of overseas investors. 

This led domestic equities to recover from its earlier losses which also helped further appreciation in the Indian currency. Indian Finance Minister (FM) Pranab Mukherjee withdrew excise duty increase on all jewellery. This led gold prices to recover most of its earlier losses and to trade at $ 1640/oz till 4.30 pm IST today. However, the government did not reverse its doubling of the import duty to 4 percent on gold.

Strength in the US dollar and weak sentiments in the global markets held further gains in the yellow metal prices. However, appreciation in the Indian rupee led gold prices on the MCX to witness a fall of around 0.8 percent and touch an intra-day low of Rs. 28,931/10 gms till 4.30 pm IST today. 

Spot silver prices traded slightly lower by 0.1 percent till 4.30 pm IST today, taking cues from a stronger Dollar Index coupled with a rise in risk aversion in the global markets. The white metal touched an intra-day low of $29.96/oz and was hovering around $ 30.28.oz till 4.30 pm IST. Strength in the Indian currency led to further losses on the MCX today.

The base metals pack delivered a weak performance on the MCX in today’s session as a stronger rupee exerted downside pressure on the metal prices. Less volatility was observed in base metals trading on the domestic platform as LME markets were closed on account of Early May bank holiday. Nymex crude oil prices declined by 0.7 percent today on the back of more than expected fall in European investor confidence coupled with strength in the US Dollar Index. 

Additionally, rising tensions in the eurozone after the elections in France and Greece also exerted downside pressure on oil prices. Crude oil touched an intra-day low of $ 95.40/bbl and hovered at $ 97.80/bbl today till 4:30pm IST. On the MCX, oil prices declined by 1.2 percent and was trading at Rs. 5186/bbl after touching an intra-day low of Rs. 5181/bbl till 4:30pm IST today.

Escalating tensions with respect to Europe’s debt crisis after elections in France and Greece has led to rise in risk aversion in the global markets and on account of this we expect the US dollar to trade higher today.

Taking cues from this coupled with weak market sentiments, we expect precious metals and crude oil prices to remain under pressure today. Base metals are expected to trade lower on the MCX today. However, less volatility will be observed in base metals trading due to closure of LME.