Commodities fall as copper posts sharpest weekly drop since March 2020, helping global stocks escape red

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Commodity prices showed signs of settling down as copper, a metal which has applications across industries and construction activities, saw its sharpest weekly fall since the pandemic-induced jolt to economic activity in March 2020. The commercial metal slid three percent in Shanghai and seven percent for the week.

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A fall in commodity prices, seen as a respite from growing inflation, saw major stock market indices around the world escape red on June 24.

Oil and food input prices, which have majorly contributed to the inflation basket, cooled off. Brent crude futures were down two percent on the week to $102.62 a barrel, while benchmark grain price Chicago wheat was trading at $9.42 a bushel, its lowest since March this year.

Commodity prices showed signs of settling down as copper, a metal which has applications across industries and construction activities, saw its sharpest weekly fall since the pandemic-induced jolt to economic activity in March 2020. The commercial metal slid three percent in Shanghai and seven percent for the week.

According to JPMorgan, Indian metal stocks, which have lost 20-30 percent of their value over the last month against Nifty shedding six percent, offer an attractive risk-reward ratio.

Factory activity across the US, UK, Japan and the euro zone showed signs of an economic slowdown with US factories reporting a drop in orders for the first time in two years, according to Reuters.

“Lower commodity prices do feel like they could be just what the doctor ordered for the global economy,” NatWest markets strategist Brian Daingerfield told Reuters on June 24.

In the last few weeks, the stock market indices were trading in the red due to concerns over high commodity prices.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose one percent, while Japan’s Nikkei rose 0.8 percent for a weekly gain of 1.6 percent on June 24. The S&P rose one percent for the session ended on June 23.

(With inputs from Reuters)

 

Hriday Sahjwani

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