Nickel On MCX Settled Up 0.5%

Nickel on MCX settled up 0.5% at 605.50 as support seen on short covering after the update that China launched a regional crackdown on the steel industry, including production of the two metals. Benchmark LME Nickel hit its highest since May 3, up 0.4 percent to $9,395. Support is expected in coming session as China's Tangshan city launched a campaign to improve air quality last week, saying that steel mills in the country's top-producing region that fail to meet emission standards face suspension and heavy fines.

Nickel has been the worst performer among industrial metals this year, down 10% in price since January. Its supply side of the equation turned more bearish as Indonesia relaxed its export ban and miners in the Philippines win disputes against environmentalists. Last week, the metal recently fell below support levels, hitting a 10-month low. Nickel was the first base metal signaling a sift of market sentiment.

Support can be seen also after the update that China's economy is likely to expand by about 6.8 percent in the second quarter of 2017, the State Information Center said. Support for base metals also came from a weaker dollar as dollar slipped to a more than six-month low on Monday, weighed down by an uncertain U.S. political climate, while oil prices rose on expectations that crude output cuts would continue and the euro surged.

Now technically market is under short covering as market has witnessed drop in open interest by -3.83% to settled at 33696 while prices up 3 rupees, now Nickel is getting support at 602 and below same could see a test of 598.6 level, And resistance is now likely to be seen at 608.8, a move above could see prices testing 612.2.

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Suhani Verma

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