(MB) Much like yesterday, most base metals prices on the Shanghai Futures Exchange were under pressure during Asian morning trading on Tuesday February 6, with sharp falls in the US stock market overnight damping market sentiment. Nickel prices continued their recent run of weakness as they led the complex, with the exception of tin, lower for the second day in a row. The SHFE’s most-traded May nickel contract fell to 101,470 yuan ($16,121) per tonne as of 10.25 am Shanghai time, down by 720 yuan per tonne or 0.7% from the previous session’s close. Tin prices, meanwhile, were the most resilient this morning, logging a slight gain of 0.05% to 150,180 yuan per tonne as of 10.25 am Shanghai time. On Monday, the US stock market suffered a major slide, with both the S&P 500 and Dow Industrials indices notching their biggest single-day percentage drops since August 2011. This comes after they posted their biggest weekly percentage drops since January 2016 last week. “The drop in the US stock market was mainly attributed to the sharp rise in the yield on US 10-year bonds, which usually means higher borrowing costs for enterprises and may prompt the Federal Reserve to raise interest rates more quickly,” an analyst at Galaxy Futures said on Tuesday. “In addition, the latest data released by the US Labor Department last week showed that wages continued to rise [in January]. Investors are generally worried that this indicates that the inflation rate will start to rise again,” the analyst added. “A stronger non-manufacturing ISM [from the United States] was not enough to stop the global equity sell off. The [CBE Volatility Index] was trading around 30… up around 70% as the S&P and Dow Jones were down sharply,” ANZ Research said on Tuesday. The notable surge in risk aversion and firmer dollar has damped market sentiment, resulting in general weakness across the SHFE base metals complex this morning.
