Chart of the day: Why you should consult ‘Dr Copper’ before investment?

Riken Mehta
Moneycontrol Bureau

The biggest dilemma for medium to long term investors is when to make an entry or exit in equity markets. Just like other asset classes, one should look at a few leading indicators before making any investment decisions. Analysts believe domestic sales of heavy commercial vehicles and prices of copper are two leading indicators which have a strong correlation with economic growth outlook. A strong performance from copper is typically seen during periods of economic expansion and vice-versa. As seen from the chart, Copper prices have been correlated with the Nifty since 2000. Recently, copper prices hit six-month low on weak demand.

See the chart below. Comex Copper Vs Nifty since 2000


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