Inflation worries could still cast a spell on domestic commodity markets.
Coming on the back of repo rate cut announced by the RBI, retail inflation based on the rising consumer price index could still jinx the market, analysts said.
The negative tidings from the Indian market come amid positive global developments.
Improved global economic growth forecast by the International Monetary Fund and easing worries over Spanish debt have soothed the market sentiments.
The unexpected rise in German business sentiments have also pacified the markets which had been hampered by worries over slowing global economic growth and resurfacing Euro zone debt crisis. However, the underlying tone in the global market stayed on the weaker side, a report by Geojit Comtrade said.
Gold
Weighed down by a weak Euro, spot gold carried on its moves in a narrow range with mild negative bias in global markets yesterday. Positive growth forecast by the IMF could dampen the sentiments in gold, often seen as a safe haven investment.
Base metals
Base metal complex on the London Metal Exchange and Shanghai edged up with copper on LME rebounding from the three-month low levels. LME copper rose above $8,000 a tonne tracking share markets yesterday.
Reports that South Korea’s central bank was to buy $300 million in Chinese stocks over the next three months also boosted the market sentiments.
Crude oil
Crude oil was trading near a two-week high after the IMF raised the global economic growth forecast. However, EIA crude oil inventory forecast show a build-up in stocks which is likely to cap further price gains. The growth in economic momentum always triggered fresh demand for crude.
Rupee
After the Reserve Bank of India cut the repo rate on Tuesday, the Indian rupee was seen trading lower at 51.645 yesterday. Analysts attributed the slide in the rupee by 0.55 per cent to revival of inflation worries.