: Base metals are slowly recovering from the morning lows on the back of depreciating local unit and gaining Euro. The Asian equities have also recovered at a slower pace ahead of the European market opening. Further, the IFO numbers from Germany are likely to remain weak and may pressurize riskier assets including base metals on the back of temporary halt in bailout negotiations,

Therefore, initiating selling at pullback might be recommended as the entire pack may remain weak due to deteriorating confidence and slower US manufacturing in the evening.

LME Inventory:

  • Copper   UP      475
  • Zinc    UP      525
  • Lead    DOWN    -2375
  • Nickel  UP      1614
  • Aluminum        DOWN    -4900

Cancelled warrant ratio :

  • Copper  UP       1.84
  • Zinc    DOWN     (0.30)
  • Lead    DOWN     (0.17)
  • Nickel  UP       3.39

IMPACT:

Metal inventories witnessed slight stockpiling except Lead and Aluminum while the cancelled warrants have increased for Copper and Nickel and may restrict downside. Overall base metals are likely to remain weak and selling at pullbacks might be recommeded.

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