Highlights
- MCX base metals rally due to China’s economic stimulus measures.
- Copper futures surged by 3.67% to ₹836.60.
- Precious metals like gold and silver also saw price increases.
- Crude oil prices rose by 2.4%, driven by heightened demand expectations.
- China’s central bank cut interest rates to support its economy.
The Multi Commodity Exchange (MCX) has witnessed a significant rally in base metal futures, buoyed by recent stimulus measures announced by China.
As the world’s second-largest economy seeks to invigorate its slowing economic growth, the anticipation of increased production and consumption has sparked optimism in commodity markets.
This surge in demand is particularly crucial for base metals and crude oil, which are heavily influenced by China’s economic activities.
On Tuesday, base metal futures on the MCX experienced notable gains, reflecting a market that is reacting positively to China’s new economic initiatives.
The measures, which aim to bolster demand and support a weakening economy, are expected to have a beneficial impact on base metals.
For instance, copper futures soared by 3.67%, trading at ₹836.60. Zinc and lead also saw impressive gains, with zinc futures climbing 2.3% to ₹272 and lead futures increasing by 3% to ₹184.5.
Precious Metals Also Climb
The upward trend is not limited to base metals; precious metals are also on the rise. Gold futures were trading higher by 0.44% at ₹74,623 per 10 grams, while silver futures gained 0.78%, reaching ₹89,926 per kg.
Notably, silver hit an intraday high of ₹90,328, demonstrating the volatile nature of these markets as investors react to economic news.
Crude Oil and Natural Gas Surge
In addition to base and precious metals, crude oil and natural gas futures are also benefiting from the news coming out of China.
On Monday, MCX crude oil futures rose by 2.4%, reaching ₹6,042 per barrel, primarily driven by the expectation of increased demand from China, the world’s largest crude oil importer.
Moreover, ongoing geopolitical tensions in the Middle East have further elevated crude prices.
Natural gas futures mirrored this trend, climbing by 2% to trade at ₹223.4 after a nearly 7% increase in the previous session.
The sustained interest in these commodities indicates a broader market sentiment that favors potential recovery.
China’s Stimulus Measures Explained
The recent announcements from the People’s Bank of China include a reduction in the seven-day repo rate and lowered interest rates for both the medium-term lending facility and loan prime rates.
These changes are aimed at addressing the current economic slowdown, which has raised concerns regarding China’s economic stability.
The measures also target the ongoing property crisis, aiming to stimulate spending and bolster consumer confidence.
