The base metal complex traded considerable lower for the entire day as the global factors turned down the table. Equities running low, with dollar index marching higher curbed the investment appeal of base metals as a safe haven avenue. Lately the data releases nearing the expectations while weak from the prior levels complemented the bearishness in the market

The dollar index, a performance track of basket majors, recovered its penultimate day’s losses to end the day at 8.2251 up by 0.52%. The refusal of European nations to provide any financial aid to the Greece economy factored losses in Euro while apprehensions over the General Elections subdued gains in Pound

Among the US economic data releases, the Industrial Production in February posted a small 0.1% rise after a 0.9% jump in January, while the Empire State's manufacturing index did slow by more than 2 points to 22.86 in March. Moreover, Foreign investment in long-term U.S. securities slowed in January, to a net $19.1 billion vs. $63.3 billion in December and an exceptionally strong $126.4 billion in November

OUTLOOK

Day ahead, the market look forward to a few important data releases from the US, Euro-zone and Germany. The German ZEW survey of economic sentiment of February month is expecting weakness to 43.5 from prior of 45.1. Eurozone CPI for February is improving to 0.30% as compares to prior of -0.80%. Coming on to the US façade, the housing sector data in form of Housing Starts and Building Permits is lowering from the previous month figures, along with weakness in import price index to -0.20% from 1.40% in January

Later on the FOMC rate decision is suggesting the bank rate to remain unchanged at the historical lows of 0.25%. However the comments by the Federal Reserve officials over economic recovery would be crucial to watch for

Equities are wading marginally higher in Asian hours after the US equity markets closed almost flat for the day. Equity gaining in later half of the day might provide some helping hand to ailing metals

The dollar index opened at 80.215 and moves low by 0.12% at 80.153. The basket majors are wading mixed currently however the dollar might be pressurized lately due to bearish data expectations from the housing sector of the US

Consolidating the view we suggest base metals open flat to slightly up as the electronic session at LME is wading marginally higher. Moreover equities in greener pastures and dollar index being low; add to the marginal upside. However, market participants would look for the host of data releases during the day. The FOMC meet would be noteworthy as the officials discuss the issues of economic recovery and impart some suggestions for the future. Overall the trend remain sideways, while evening market might turned slightly low due to negative data figures

Courtesy: Karvy Commtrade Ltd.

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