Zinc Drops nearly 4% in the Domestic Market

Zinc plunged nearly 4 per cent in the domestic market on Tuesday as metal commodities bore the brunt of China’s move to devalue its currency by the most in two decades, raising concerns that a devalued currency may curtail Chinese buying of the industrial metal as commodity imports become more expensive for the world’s biggest metals consumer.The People’s Bank of China cut its daily reference rate by a record 1.9 %, prompting the biggest slide in the yuan since January 1994 after the country’s trade slump deepened while producer prices tumbled to a six-year low . The move to devalue the currency also signaled the extent of panic among Chinese officials to revive an economy set for the lowest growth in two decades.Meanwhile, investors cast aside data which showed that Chinese lending picked up in July, mainly attributed to efforts to revive a beaten down stock market. Chinese banks and financial institutions issued 1.48 trillion yuan worth of new loans in July, up from 1.28 trillion yuan in June.

At the MCX, Zinc futures for August 2015 contract closed at Rs per 116.15 1 kg, down by 3.85 per cent after CRACKING at Rs 120.10, against the previous closing price of Rs 120.80. It touched the intra-day low of Rs 115.95.

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