Copper gains as investors welcomed Beijing's efforts to bolster property market

Copper exhibited a gain of 0.59%, closing at 739.95, as investors responded positively to Beijing's initiatives aimed at shoring up the property market. These measures include reducing mortgage rates for first-time homebuyers and adjusting down payment requirements in select cities. The upbeat sentiment is further fueled by China's favourable Purchasing Managers' Index (PMI) data, which has heightened expectations for a resurgence in demand. China's factory activity, as per a recent private-sector survey, unexpectedly swung back into expansion mode in August. This expansion is evident in improvements across supply, domestic demand, and employment. 

The proactive steps taken by Beijing to support the real estate sector, coupled with the promising PMI figures, have garnered investor approval. Notably, the real estate market's health has a significant impact on copper due to its extensive use in construction and infrastructure. Beyond this, the electric vehicle (EV) market's growth and the rapid expansion of India's economy are poised to drive global copper demand. In India alone, copper demand is anticipated to exceed 1.5 million tons by 2025, marking a 40% increase from 2022 levels. 

From a technical perspective, the market is currently experiencing short covering. Open interest has decreased by -8.42%, settling at 4949, while prices have risen by 4.35 rupees. Copper is finding support at 735.7, with the potential for a test of 731.4 if this level is breached. On the upside, resistance is likely at 745.4, and a move above this level could see prices testing 750.8.