The base metal complex traded mostly mixed for the day as the market factors could not lend strong support for prices to move in one direction. The absence of economic data release from either of the US, Euro-zone or Germany marked lack luster trades for the day

The dollar index, a performance track for the majors, traded mostly up for the day as the heavy Japanese Yen depreciation caused a rally in prices. Dollar index closed the day at 80.592, up by 0.20% after making an intraday high of 80.855

The London Metal Exchange warehouses inventory is eyeing a downtrend for most of the metals, however the fall in cancelled warrants ratio negate the effect. Copper inventory dropped for a fifth day yesterday to 538,875 tonnes, the longest phase of declines since July. Furthermore, the Shanghai Future Exchange Stockpiles fell from the highest level in more than seven years last week

OUTLOOK

The Chinese trade balance figures for February month has come slightly better than the expectations at $7.61 billion while halved from the prior month of $14.17 billion. Moreover the exports increased tremendously to 45.7% against prior of 21.0% while imports fell to 44.7% compares to prior of 85.5%

Day ahead, the market look forward for a few important data releases from the US, and Germany. The Germany is due to release the current account and import-export figures for January month dampening from the prior releases, while the Consumer price index is expected to remain mostly unchanged. Moreover the US Wholesale inventories for January month are expecting some stockpiling of 0.20% as against the fall of 0.80% in December

The Wall Street equities ended the prior day on a mixed note; however the equities in the Asian hours are currently trading in mixed to higher territories. Mixed trades in equity market causes similar sentiments to follow in commodities market as well

Consolidating the view we suggest base metals to open on a regular customary note, as electronic session at LME is running marginally higher. The host of data releases would instill heavy trigger in the market, while dollar index would remain the prime concern. Equities turning positive supplement upside during the day. The fall in LME inventory suggest demand for base metals to come in the long run from the major consuming nations. Over all we expect prices to trade sideways to higher thus buying on dips could be a suggestive strategy for the day

Courtesy: Karvy Commtrade Ltd.

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