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MTECHTIPS COMMODITY MARKET NEWS 4

MTECHTIPS:-COMMODITY NEWS
China’s manufacturing activity snapped a 12-month contraction streak and expanded in November 2012 amid a pickup in demand, a sign that Asia’s largest economy may rebound this quarter following a seven quarter slowdown, brightening the demand outlook for leading industrial commodities, lifting crude oil and copper futures in the domestic market on Monday. The gauge measuring manufacturing in China rose to 50.5 last month from 49.5 in October, with a reading above 50 signaling expansion, HSBC said.Greece kick-started a 10 billion euro debt buyback program even as German Chancellor Angela Merkel hinted at a future write-off of Greek debt while Spain requested for 37 billion euro of aid for its cash-strapped banks, easing worries over Europe’s debt crises, lifting the demand outlook for top leading industrial commodities, supporting crude oil and copper futures in the domestic market on Monday.US manufacturing activity shrank for the first time in three months in November 2012, a sign of weakening demand amid the fiscal-cliff fears, raising worries over the health of the world’s largest economy,dimming the demand outlook for leading industrial commodities,trimming gains in crude oil and copper futures in the domestic market on Monday. Te ISM’s gauge of manufacturing fell to the lowest level since July 2009 to 49.5 last month from 51.7 in October, with a reading below 50 signaling contraction.Gold futures rose in the domestic market on Monday amid firm global cues and hopes that the Fed may boost monetary stimulus to bolster the US economy, lifting the outlook of the bullion, a hedge against the inflationary risk of monetary stimulus. Gold futures rose in the overseas market on Monday as a weaker dollar spurred the demand for the precious metal as an alternative asset.

MTECHTIPS:- COMMODITY MARKET OVERVIEW
The domestic commodity markets closed on an upbeat note on Monday as bullish Chinese economic data signaled a rebound in the world’s second largest economy, lifting the demand outlook for top industrial commodities. China’s manufacturing snapped a 12-month contraction streak and expanded in November 2012 amid a pickup in demand while services growth accelerated, a sign that Asia’s largest economy may rebound this quarter following a seven quarter slowdown. The gauge measuring manufacturing in China rose to 50.5 last month from 49.5 in October, with a reading above 50 signaling expansion, HSBC said. A boost in Japanese capital spending eased fears of a recession in the world’s third largest economy, bolstering the demand outlook for top industrial commodities. Japan’s Capital spending excluding software rose 2.4 per cent in Q3 2012 from the same period last year. Easing worries over Europe’s debt turmoil also brightened the demand outlook for leading industrial commodities. Greece kickstarted a 10 billion euro debt buyback program even as German Chancellor Angela Merkel hinted at a future write-off of Greek debt while Spain requested for 37 billion euro of aid for its cash-strapped banks. However, downbeat US manufacturing data and deepening fears over the looming fiscal cliff of spending cuts and tax hikes in the US casted a shadow over the demand outlook for leading industrial commodities, trimming gains at domestic commodity indices. US manufacturing shrank for the first time in three months in November 2012, a sign of weakening demand amid the fiscal-cliff fears, raising worries over the health of the world’s largest economy. The ISM’s gauge of manufacturing fell to the lowest level since July 2009 to 49.5 last month from 51.7 in October, with a reading below 50 signaling contraction. Meanwhile

no progress in US budget talks raised worries that the US may fail to avert the automatic spending cuts and tax hikes that is set to take effect from the start of 2013 and threatens to drag the world’s largest economy into a recession. U.S. Treasury Secretary Timothy F. Geithner and House Speaker John Boehner each pointed fingers at the other side for their unwillingness to bend from their hard stance. Meanwhile, Eurozone manufacturing shrank for a sixteenth straight month in November, albeit at a slower pace, offering little hope for a revival in demand for leading industrial commodities from the recession-hit region, trimming gains in domestic commodity indices.All the four indices at the Multi Commodity Exchange (MCX) ended higher on Monday. MCXCOMDEX closed at 3,833.94 (up by 0.56 per cent), while MCXMETAL closed at 5,415.44 (up by 0.64 per cent), MCXENERGY closed at 3,428.81 (up by 0.61 per cent) and MCXAGRI ended at 2,248.01 (up by 0.09 per cent). MCXMETAL was the top gainer at the domestic commodity indices as Copper futures rose as bullish Chinese economic data lifted hopes of a pickup in demand for the base metal in China, the largest global metal consuming nation. Gold futures rose in the domestic market on Monday amid firm global cues while hopes that the Fed may boost asset purchases to bolster the US economy, lifted the outlook of the bullion, a hedge against the inflationary risk of monetary stimulus. Gold futures rose in the overseas market on Monday as a weaker dollar spurred the demand for the precious metal as an alternative asset. MCXENRGY also rose as Natural Gas futures advanced as forecasts for cooler weather in the US next week lifted the demand outlook for the fuel, which is used for heating purposes.Crude Oil futures also advanced amid hopes that an economic rebound in China,the second largest crude oil consuming nation, may spur the demand for the fuel.On the agri-front, Mentha Oil futures rose as traders enlarged positions amid a pickup in physical demand for Mentha Oil and reports of lower output

MTECHTIPS:-CRUDEOIL
Crude Oil futures rose by 0.64 per cent at the domestic markets on Monday after Markit Finacial Information Services said that Spain’s Manufacturing PMI rose to 45.3, from 43.5 in the preceding month indicating a strong manufacturing activity in the region which increased the demand prospects for the fuel. Sentiment improved further as a pickup in China’s manufacturing activity signaled an economic rebound in the world’s second largest crude oil consuming nation, lifting the demand outlook for the fuel. The gauge measuring manufacturing in China rose to 50.6 last month from 50.2 in October, with a reading above 50 signaling expansion, the China Federation of Logistics and Purchasing said. Crude oil prices also rose after a report said that business activity in the US snapped a two-month contraction streak, expanding in November 2012 as the world’s largest economy rebounded following the effects of Super Storm Sandy, signaling an upbeat demand outlook for the fuel. The Institute of Supply ManagementChicago’s business barometer, a gauge measuring business activity in the US, rose to 50.4 last month from 49.9 in October, with a reading above 50 signaling expansion. Meanwhile, J.P. Morgan raised its average 2013 oil price outlook for Brent crude by USD 2 a barrel to USD 115 a barrel amid a pickup in demand and a lower than expected growth in non-OPEC supply outside North America. The gains in the fuel were curbed after the manufacturing activity in the U.S. deteriorated unexpectedly in November, contracting for the first time in three months indicating a weak manufacturing activity in the world’s largest consumer of crude oil which dampened the demand prospects for the fuel. The Institute for Supply Management said its index of purchasing managers fell to 49.5 in November from a reading of 51.7 in October. At the Multi Commodity Exchange (MCX), crude oil futures for December contract closed at `4,878 per barrel, up by 0.64

per cent after opening at `4,854 against the previous closing of `4,847. It touched the intra-day high of `4,942 per barrel.Currently, Crude futures for the January 2013 contract in the overseas market are trading at $88.81 per barrel, down by 0.33 per cent at 9.21 AM IST.

MTECHTIPS:-GOLD
Gold futures rose by 0.52 per cent at the domestic markets on Monday as investors and speculators created fresh positions in the precious metal in the midst of a bullish trend in overseas markets. Gold futures rose in the overseas market as a weaker dollar spurred the demand for the precious metal as an alternative asset. A weaker greenback makes the precious metal less expensive for those holding other currencies, this boosting gold demand. The U.S. dollar index, a measure of the value of the United States dollar relative to a basket of foreign currencies, closed 0.36 per cent lower at 79.872 on the InterContinental Exchange (ICE). The US dollar weakened against a basket of six currencies as robust Chinese economic data and easing worries over the European debt turmoil dimmed the safe haven appeal of the dollar, lifting demand for riskier assets. China’s manufacturing activity expanded at the fastest pace in seven months in November as new orders rose, signaling a rebound in the world’s second largest economy following a seven quarter slowdown. Meanwhile, the German Parliament approved the latest Greek aid while Chancellor Angela Merkel hinted at a future write-off on Greek debt.However, gains in the yellow metal were curbed as the uncertainty about the U.S. budget talks kept investors on the edge. The Republicans and the White House have made little progress in their negotiation to avert the automatic kick-off of $600 billion tax hikes and spending cuts early next year. At the MCX, gold futures for December 2012 contract, at MCX, closed at`31,262 per 10 grams, up by 0.52 per cent after opening at `31,250 against the previous closing price of `31,101. It touched the intra-day high of `31,337. Currently, Gold futures for the February 2013 contract in the overseas market is trading at $1,715.4 per ounce, down by 0.33 per cent at 9.21 AM IST.

MTECHTIPS:- COPPER Copper futures ended higher in the domestic market on Monday after Markit said that HSBC Markit India’s Manufacturing PMI rose more than expected to a seasonally adjusted annual rate of 53.70, from 52.90 in the preceding quarter signaling an improving manufacturing activity in the country which raised demand prospects for the industrial metal. Sentiment improved further due to the deepening supply concerns over the base metal. A report by Barclays said that copper demand will exceed supply by 316,000 metric tons in the first half of 2012. Global copper demand is tipped to grow by 3.4 per cent to 20.85 million tons next year, up from a 1.5 per cent gain in 2012 amid a rise in Chinese demand, the UK bank said. China’s copper demand is tipped to grow by 5.5 per cent to 8.1 million tons in 2013, up from a gain of 4.8 per cent this year, the Beijing Antaike Information Development Co. said. Moreover, a weaker dollar makes copper cheaper for those holding other currencies, thus increasing demand. The U.S. dollar index, a measure of the value of the United States dollar relative to a basket of foreign currencies, closed 0.36 per cent lower at 79.872 on the InterContinental Exchange (ICE).However, gains in the base metal were curbed due to the surge in the copper stockpiles at the London Metal Exchange (LME)

on account of the weak demand for the commodity. LME copper stocks rose by 2900 metric tonnes to 251050 metric tonnes as on December 3, 2012. On the MCX, Copper futures for February 2012 contract closed at `444.45 per 1 kg up by 0.82 per cent, after opening at `441.70 against the previous closing price of `440.85. It touched the intra-day high of `445.10. Currently, Copper futures for the March 2013 contract in the overseas market, are trading at $3.6450 per pound, up by 0.37 per cent at 9.21 AM IST.