Commodities fall on global cue

Mumbai, May 15 | Updated: May 16 2006, 06:21am hrs
Hard commodities tumbled in the Indian market on Monday, after prices of copper, silver and oil slumped in the overseas market on concerns the prices were exaggerated and demand will fall due to rising interest rates.

Copper, aluminium, zinc and silver hit lower circuits on the Multi Commodity Exchange (MCX) of India. Price of gold also dropped after it fell in the London market to trade below $700.

In London, copper fell as much as 9% on Monday, the most since October 2004, paring this years 93% gain, while zinc tumbled as much as 12%, the most since at least 1989.

Silver for immediate delivery, up about 50% this year, dropped as much as 6.2%. Gold slipped almost 4%. On MCX, copper and aluminium fell 6% by 1700 hrs local time, while zinc and silver fell 8.8% and 7.35%, respectively. On MCX, 9% is the maximum permissible price fluctuation in metals trading.

The trading halts for 15 minutes once the prices hit the first price band of 6%. A further 3% is allowed after the cooling off period.