Aluminium market under long liquidation, open interest drops 8.73%

Aluminium settled down -0.47% at INR 105.65 on the possibility of a Grexit increased, allowing market panic to grow. Also pressure seen after China imported 6,738 mt of primary aluminum in May, down 71.98% YoY, customs data showed. Also pressure seen after last ditch Greek debt negotiations broke down over the weekend, bringing the country a step closer to a debt default ahead of a looming deadline for a repayment to the International Monetary Fund on Tuesday.

Despite the deposit reserve ratio and interest rate cut by the PBOC, CSI 500, IH 50 and IF 300 indexes plummeted as a large number of financiers closed positions, though clawed back some losses at the end of trading. This depressed market confidence. The China Securities Regulatory Commission (CSRC) expects to ease market panic. The Ministry of Human Resources & Social Security and the Ministry of Finance solicited advises for the Investment & Management Methods for Basic Old-Age Pension. While the European Central Bank rejected Greece’s application for EUR 6 billion emergency liquidity assistance, but agreed to leave the ceiling for ELA at EUR 89 billion until the referendum to be implemented July 5. This allowed global stocks markets to plunge.

Meanwhile US pending home sales were at 0.9%, falling short of the 1.2% expected. But market believes US Pending Home Sales Index, which tracks contract signings hit a new high since April 2006, and rose for the fifth straight month, meaning US property market is recovering. Technically market is under long liquidation as market has witnessed drop in open interest by -8.73% to settle at 4725, now Aluminium is getting support at INR 104.7 and below same could see a test of INR103.8 level, and resistance is now likely to be seen at INR 106.5, a move above could see prices testing at INR 107.4.

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