Copper falls over 2%, hits near 3-month low

MUMBAI - Copper futures shed more than 2 percent on Wednesday to its lowest in nearly three months, tracking overseas losses, but a weaker rupee

kept the downside limited, analysts said. The most-active copper May contract was trading 2.10 percent lower at 310.10 rupees per kg at 5:09 p.m., after hitting a low of 309.6 rupees, a level last seen on Feb. 11.

"Copper will continue to be on weaker side, selling is recommended at 313-315 rupees, for a target of 308/306, maintaining a stop loss of 317 rupees," said Tejas Seth, senior analyst with SMC Global. Three-month London copper was trading 2.75 percent lower $6,830 a tonne. London copper, which guides the domestic market, slid to their lowest in more than two months as fears of contagion from Greece and worries about Chinese demand prompted investors to retreat from industrial metals.

The Indian rupee weakened to its lowest level in more than a month on Wednesday as broad dollar buying due to fears of a Greece contagion weighed on the euro and other Asian currencies. A weak rupee makes the dollar-quoted asset expensive. Most other base metals struck lower limits on global demand concerns. Stainless steel material nickel was trading down 8.35 percent at 1,008.60 rupees per kg.

"Weakness could persist in nickel and may find support at 970 rupees," said Praveen Singh, an analyst with Sharekhan Commodities. Zinc for May delivery was trading down 3.29 percent at 92.60 rupees per kg, after hitting a contract low of 91.9 rupees. Lead for May delivery was trading 3.89 percent lower at 89.05 rupees, after hitting a contract low of 88.7 rupees. "We are short on aluminium, selling could be done at 96.60, maintaining a stop loss of 97.30, targeting 94 rupees," said Singh. Aluminium for May delivery was trading at 1.92 percent lower at 94.75 rupees per kg.