MCX Copper Soars To Rs 480 On INR, Strong Global Cues

MCX Copper futures jumped yet again as a wild up move extended amid further deterioration in the Indian Rupee. The global prices also marched a handsome recovery on positive China manufacturing data though the undertone in Asian stocks remained lax on worries that the US Fed is about the taper asset purchases by the year-end. COMEX Copper is quoting at $3.3450, up 1% on the day right now.

China's manufacturing activity is swinging to growth this month, according to a preliminary reading of HSBC's Purchasing Managers' Index, released Thursday. The flash reading of the China manufacturing PMI, compiled by HSBC and Markit, rebounded to a four-month high of 50.1 from an 11-month low of 47.7 in July. A reading below 50 indicates contraction in sector activity, while one above 50 shows growth.

The keenly awaited minutes of the last US Fed meet revealed yesterday that ''a few'' members of the Federal Open Market Committee (FOMC) ''suggested that it might soon be time to slow somewhat the pace'' of asset purchases, the minutes said. But the timing of the Fed's plan to taper its stimulus program remained unclear, as others in the group ''emphasized the importance of being patient''. They said more data gauging growth in the economy was needed before reducing the $US85 billion-a-month bond-buying program.

Fed officials also discussed the rise in interest rates following the June FOMC meeting. Some participants indicated that overall financial-market conditions had tightened significantly. They also expressed concern that the higher level of longer-term interest rates could be a significant factor holding back spending and economic growth.

Copper had soared to fresh two and half-month highs amid supportive Chinese data last week and weak US dollar. Apart from a surge in exports and industrial production figures, the China copper imports also jumped by 8.1% to 410,680 tonnes in July from 379,951 tonnes in the previous month. The National Bureau of Statistics of China said that Chinese Industrial Production rose to 9.7% in July, from 8.9% in the preceding month. Chinese trade data was also good with exports surging by 5.1% from a year earlier after 3.1% drop in the last month.

While the Fed minutes make it clear that the central bank would mostly cut back on its asset buying by the year-end if the economy continues to show positive signs, the global stocks are getting uneasy on this development. Most of the Asian stocks are down around half a percent. The Indian Rupee plummeted to fresh lows above 65 per dollar mark today and provided a massive support to the local copper futures. The MCX Copper futures are currently trading at Rs 480.85, up Rs 9.95 per kg or nearly 2% on the day.

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