MCX Copper Tips

MCX Copper futures tumbled further during the afternoon trades, extending a weak start today as dollar rallied and global prices dropped. The LME Copper futures tumbled under $7900 per tonne amid economic worries and a bout of strength in US dollar. European stocks dropped heavily following Standard & Poor's decision to cut the credit ratings of five Spanish regions as well as an earnings warning from US chemicals giant DuPont. LME Copper trades at $7856 per tonne, down $86 per tonne on the day.

The Spanish economy contracted by 0.4% in the third quarter of 2012 amid challenging economic conditions and persistent government austerity measures, according to a latest report from the Bank of Spain today. The contractionary course on which the Spanish economy had embarked a year earlier continued in the central months of the year, in a setting marked by financial conditions that were adverse though somewhat slacker than in the previous quarter, the bank noted.

Data out yesterday in Asia showed that the Japanese exports tumbled by 10.3% in the year to September, recording a drop for fourth consecutive month. This was the biggest drop in the measure for nearly 18 months. This hurt the sentiments on worries that the global economy is extending its weak run and demand for copper might slow in near term. In a continued spree of depressing news for world economy, the German central bank stated that there are increasing signs that a perceptible expansion of economic growth in the third quarter of 2012 will be followed by stagnation or even a slight decrease in gross domestic product in the final quarter of the year.

US Dollar rose to a one week high following the Spanish economic worries amid an overall bearish undertone in risky assets. The currency quotes just above 1.3000 levels against the Euro right now. All the commodities like gold and crude have tumbled by more than 1% and a similar undertone prevails in European stocks too. MCX Copper futures had slipped under Rs 430 levels yesterday and traded negatively right from the start today. The commodity quotes at Rs 426.60, down Rs 3.40 per kg or 0.56% on the day with 4.83% increase in the open interest.