You are here: Home » Markets » Commodities » Industrial Metals
Business Standard

Crude oil and metals slide on global cues; cryptocurrencies crash

Doom sentiment in financial markets has hit crypto currencies. Bitcoin fell $1,000 in 15 minutes to trade at $6,000 level

Rajesh Bhayani  |  Mumbai 

copper
LME copper dropped to over 2% to $5,409 a tonne, lowest since December 2016

Commodity prices continued to fall in line with global markets, with copper leading the decline in on Thursday.

Doom sentiment in financial has hit crypto currencies. Bitcoin fell $1,000 in 15 minutes to trade at $6,000 level.

A few days earlier, it was at $9,250. Ethereum and Ripple were also sharply down. And analyst tracking crypto currencies said this was in line with the sentiment with other asset classes in financial

Market veterans said investors and traders were booking profits wherever possible. In the international market, “only sentiments are driving. Fundamentals and technicals are behind”, said Gnanasekar Thiagarajan, director at Commtrendz Research.

On Thursday, copper dropped over 2 per cent on the London Metal Exchange (LME) to $5,409 a tonne, the lowest since December 2016. Later in the day, it cut some losses to trade 1.7 per cent lower at $5,433.5.

chart

The fall in other was sharper in copper and nickel (3.3 per cent) and zinc (1.2 per cent). Silver was down 3.37 per cent to Rs 44,280 per kilo and gold was down to Rs 1.45 per cent to Rs 42,726 per 10 gram on MCX futures.

The decline in other was not as sharp, perhaps because these had fallen earlier. Silver was also falling, though the dip was curtailed in afternoon trading.

On the Multi Commodity Exchange (MCX), crude oil traded 7 per cent lower, at Rs 2,310 a barrel.

“Till there are concrete reports of a vaccine for curing patients hit by the coronavirus, the market is not likely to get solace,” says Thiagarajan. “Recovery should (then) also be fast. Lots of money is said to be waiting on the sidelines.”

Algorithm players are also heavily selling, with new technical supports being broken. Their bets will swing with the sentiment.

Even agriculture were down. Guar gum and guar seed futures were locked in the lower circuit on the National Commodity and Derivatives Exchange. Crude palm oil futures were down 2.9 per cent on the MCX.

“With Brent crude oil prices falling nearly 50 per cent since early January, the attractiveness of edible oil (both palm and soy oil) usage in bio-fuel blending has reduced drastically. Guar gum fell because it’s used in fracking, a method of extracting shale gas that involves pumping of pressurised gas into the ground,” explained Ravindra Rao, head of commodity research at Kotak Securities.

First Published: Fri, March 13 2020. 00:53 IST
RECOMMENDED FOR YOU