On Thursday, there was a broad based sell off in commodities as the dollar surged on the back of commentary from ECB Head Jean Claude Trichet as well as short covering from its recent sell-off. As a result, the CRB commodity index dropped nearly 5%. Oil collapsed, the Nymex crude slipped below the USD 100 a barrel mark.
In an interview with CNBC-TV18, Laurence Balanco, Asian Technical Research, CLSA says, he expects commodities to be rangebound in near-term. However, he says, the long-term trend is still up. Though correction in crude has aided the Indian market today, Balanco feels that the Nifty could retest 5,000-5,100 this summer. However, according to him, long-term price action for the Nifty remains constructive. Also read: Market to trade in range of 17000-19000, says Baer Cap Below is a transcript of his interview with CNBC-TV18's Udayan Mukherjee. Also watch the accompanying video. Q: What did you make of the commodity sell-off? Were you expecting it? A: Looking at the reaction that we had from silver at the start of the week, it looks like we are running into a volatile period in commodities, which is obviously followed through by the end of the week. What we see now after an accelerated move, particularly in silver, the reaction against that, if you look at historic patterns, typically tends to lead to some period of ranging that needs to work off the psychological damage that these corrective moves have done over the past week. There are two things to remember now on the commodity prices that the longer-term trends are still up. Secondly, over the coming summer months, we are going to see a ranging period in commodities. Q: ThatDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
