As expected in the morning CDRR report, base metals opened on a positive note and have shredded most of the gains as the session progresses. Internationally prices have also declined as investor concerns have shifted from optimistic monetary policy of Central banks to weak state economic releases.
However, at our domestic market the UPA has backed support from the Mulayam Singh led Samajwadi Party and the finance ministry has indicated to limit budget deficit to 5.3 percent of GDP. Improved political outlook and FDI and diesel price hike on the back the local unit rallied 1.5 percent pressurizing base metals.
We expect,base metals to remain feeble later during the day due to lack of cues from economic front coupled with rising weekend selling pressure.