Copper On MCX Settled Up 0.26%

Copper on MCX settled up 0.26% at 359.8 with investors tempted by falling stockpiles and as Chinese authorities' move to ease monetary policy spurred growth hopes. China's central bank injected fresh funds through a medium-term lending facility while keeping a tight rein on short-term funding in an effort to dampen speculative investment. Chinese banks extended 1.1 trillion yuan ($159 billion) in net new yuan loans in April, above expectations.

Reining in excessive local government debt and the shadow banking sector in China has been high on the central government's agenda in recent weeks, leading to concerns growth will stall. The dollar fell after weaker-than-expected U.S. economic data raised doubts about whether the Federal Reserve will assume a hawkish bent through the year end. China's industrial output is expected to have risen by 7.1 percent in April, slowing from a 7.6 percent rise in March, while fixed asset investment probably stayed relatively stable at 9.1 percent in April.

China’s refined copper cathode output is expected to slow further in 2017. New capacities coming online decreased in 2016, and new capacities in 2017 will be mainly commissioned in the second half of the year, explaining the reason behind such a prediction. China's copper smelting and refining capacity will increase to 7.70 million tonnes and 11.40 million tonnes, respectively, in 2017. LME data showed copper stocks fell 7,350 tonnes to 329,375, their lowest since March 3.

Copper stocks in Shanghai Futures Exchange warehouses fell to 194,993 tonnes, their lowest since Jan. 20. Technically market is under short covering as market has witnessed drop in open interest by -2.3% to settled at 16671, now Copper is getting support at 358.3 and below same could see a test of 356.7 level, And resistance is now likely to be seen at 361.2, a move above could see prices testing 362.5.

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Suhani Verma

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