Base metals settled lower on Tuesday than their previous close against the backdrop of fluctuations in the U. S. dollar and mixed economic data that raised some concerns about the pace of economic recovery.

Nickel was the only metal that held its ground and settled up by 1 percent and over 2 percent on MCX and LME respectively. LME Zinc lost the most in the complex, shedding around 1.5 percent.

A sharp 17.2 percent rebound in U. S. May housing starts pointed to some stabilization in the sector, while a smaller-thanexpected 0.2 percent rise in producer prices signaled inflation pressures were muted.

Zambia, Africa's top copper producer, was plunged into darkness on Monday night after a key transformer on the national power grid was gutted by fire prompting the state power utility Zesco Ltd., to immediately start importing power from the DRC. Power blackout has forced Zambian copper mines to trim output and shut down machinery.

A sharp correction has taken place in base metals complex in the last few sessions as we have seen some profit booking taking place. We expect base metals to trade sideways to down during the day. The weak industrial output report has also raised some demand concerns. We do not recommend buying and one should remain cautious in this complex.