The gloom surrounding base metals led by copper triggered due to escalation of the Greece debt crisis, is expected to continue for some more time over renewed concerns that the crisis now can spread to Hungry.
Rising fears about the debt crisis in the euro zone countries have triggered selling in the commodities market with metal complex suffering the most.
Falling euro has prompted investors to liquidate their position in riskier assets like equities and commodities. Copper slumped to its lowest price in more than seven months on Monday on the London Metal Exchange to $6,076.25 a tonne, down 3.2% from previous close.
In the domestic markets, Copper for June delivery on the MCX fell to its eight-month low of Rs 286.65 per kg on Monday before closing at Rs 288.90 per kg, down 1.43% from previous close.
Copper, often viewed as a bellwether for the global economy, has been more resilient than most other metals in the base metal complex, with investment demand supporting prices at lower levels.
?Broad sentiments have remained edgy lately with traders opting to cash out on most of the profitable positions whenever they could, in a true reflection of the scenario in most of the global markets.? said Anand James, chief analyst, Geojit Comtrade.
Analysts feel that fundamentals are bearish and this is not the right time to bargain-hunt in copper. ?Markets are not in a positive frame of mind. Prices of base metals like copper can fall further. Major support levels are at Rs 270-280 on MCX. Go short in copper rather than buy in copper.? suggested Amar Singh, head commodity research, Angel Broking. Supporting his views, Basant Vaid, senior analyst in Bonanza Commodity brokers said, ?Copper is poised to extend losses. The situation doesn?t seem to be sorted out in the near future.?
Analysts said, though US economy has shown signs of recovery through a series of positive economic numbers, last week?s disappointing private payrolls numbers as shown in the non-farm payroll data has put a question mark on sustained recovery.
?It is likely that we may see more weak economic numbers as an after-effect of April-May when sentiments were at some of their lowest,? Anand James said.
Experts believe that though Chinese copper demand is a big supporting factor for prices, questions are being raised about its ability to sustain high consumption for a long period. China accounts for more than 30% of global copper demand, estimated to be around 19 million tonne in 2010.
?Technical charts show 280-285 region as a point of turning higher towards 300, which is a firm a resistance. Supports below 280 are at 255 and 243.? added Anand James.
Copper traded Rs 1.25 or 0.44 % higher at Rs 288.60 per kg in futures trade at MCX on Wednesday, after taking cues from overseas amid pick-up in spot demand.