Hindustan Copper, Vedanta, SAIL and Adani Enterprises were among the Nifty Metal constituents that saw renewed buying in intraday trade on Thursday, December 04, following a solid overnight rally in base metal prices.
The rally was driven by a weaker US dollar Index, which makes commodities priced in dollars cheaper for global buyers, after US payroll data reinforced expectations that the Federal Reserve may cut interest rates at its final policy meeting of the year.
The US dollar Index, which measures the greenback’s strength against a basket of six major currencies, closed 0.49% lower in the previous session at 98.86, marking its ninth consecutive session of losses and the lowest level since October 29.
Looking at individual stocks, Hindustan Copper jumped 6.6% to the day’s high of ₹361.80 apiece, while Vedanta, Adani Enterprises, National Aluminium, SAIL, NMDC, and Hindalco Industries also traded with gains in the range of 0.50% to 1.3%.
Data on Wednesday showed US companies shed payrolls in November by the most since early 2023, reinforcing concerns about a more pronounced labor market weakening.
Fed funds futures now indicate an implied 89% probability of a 25-basis-point rate cut at the US central bank’s December 12 meeting, compared with an 83.4% chance a week earlier, according to the CME Group’s FedWatch tool.
Investors now turn to delayed September PCE data on Friday for further clues on monetary policy. Adding some support was a geopolitical risk premium, as the US and Russia concluded talks on the Ukraine war without any breakthroughs.
Dollar slide and supply squeeze push copper to record high
The benchmark three-month LME copper touched a record of $11,541 a ton on Wednesday, and the metal is now heading for its largest yearly gain since 2017, rising 31% so far this year.
Apart from the weak US dollar, the rally was also supported by concerns over a global supply squeeze, as shipments were accelerated toward the US before new tariffs took effect.
Among other base metals, tin climbed 4.2% to $40,675 a ton, after touching its highest level since May 2022 at $40,895. Aluminium rose 1.1% to $2,897 a ton, zinc held steady at $3,063, lead edged up 0.1% to $1,997.50, and nickel advanced 0.6% to $14,895.
Base metal prices have seen a strong rally this year, supported by expectations of US Federal Reserve rate cuts, a weakening dollar, and improving growth prospects in China. Additional tailwinds from supply disruptions, policy changes, and increased capital expenditure in the aluminium sector have also kept metal prices elevated.
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