Equity Market and Equity Trading

Refined Copper prices in Aug traded higher on reports of falling concentrate
production and an expected drop in refined metal production due to a very
low TC/RC margins for smelters. Also supporting coppers gains were falling
stocks at LME and Shanghai and a consequent tightening of the cash to 3 month
spread. The July-Aug period seasonally is a lean phase in terms of demand and
copper price usually trades steady, but the supply constraint this year is lending
support to prices. As we move towards a higher demand season we see factors
turning favorable copper and is likely to hold in the trading range of $7300 (Rs.
345) to $8000 (Rs. 375) this month. However, for gains above $8000, copper
will need a lot more positive macro-economic developments and news flows

Refined Zinc prices has been trending higher on shrinking supply surplus,
upswing in demand growth from China and on the fast paced measures from
Chinese authorities to fully utilize the stimulus money by end of the year. The
sub par data on U.S home sales, however could keep a check on prices but this
scenario could reverse given the rise in prices as observed from Case-Schiller
home price index. Putting these factors together we expect current uptrend
in zinc to continue till $2300 (Rs. 107.5) and $2400 (Rs. 112) while support
at $2040 (RS. 97) is held. For zinc prices to trend above $2400 which is a
long term trend line resistance, market may need lot more positive triggers

Refined lead prices are expected to trade firm till $2300 (Rs. 108) for
this month, but crossing through that will be a tough task given the supply
overhang. Support could be derived from strength in other base metal price,
the galloping year on year rate of increase in demand for original equipment
lead acid batteries and an expected seasonal rise in demand for replacement
batteries. We think these factors will keep the lead supported at $2040 (Rs. 96.7)

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