Copper slips as recession fears persist

Print this page Posted on : 01-24-2008 by recycleinme.com

Copper drifted lower on Wednesday as fears of a looming recession in the US persisted despite an aggressive rate cut by the US Federal Reserve.

Copper for three-months delivery on the London Metal Exchange was at $6,970/6,990 a tonne at 1014 GMT, down $50 from its close on Tuesday, when it rallied 5 per cent move from a day-low of $6,675 it hit in the previous session.

The US Federal Reserve cut its interest rates by 75 basis points - the biggest cut in more than 23 years - in a bid to prevent the economy from sliding into recession.

SENTIMENT DOMINATES

Slowing growth in the world's biggest economy, which the Fed is trying to prevent by lowering the cost of borrowing, could hurt demand for metals.

Industrial metals have been focusing on movements in global financial markets in recent weeks rather than on supply and demand fundamentals, dealers say.

''Fundamentals really had little to do with any of ... (the) moves. Instead, the metals again looked to technical signals, the rest of the complex and the wider global markets for direction,'' Standard Bank said in a research note.

European stocks turned to negative after rising by 1.6 per cent earlier while the MSCI world equity index trimmed previous gains.

LME zinc fell $45 to $2,260/2,270 after gaining more than 3 per cent in the previous session.

Lead edged down $5 to $2,565/2,585.

Aluminium shed $7 to $2,420/2,422, while nickel was down $300 to $27,200 and tin was $100 lower at $16,100/16,300.

Source : Business Line