Base metals futures trimmed their morning losses on Thursday as the dollar fell further against the euro during the day and Initial claims and Jobless claims data showed some stabilization in the manufacturing sector.

Nickel gained almost 1.5 percent while Aluminium rose by 1.23 percent on LME. However, Nickel and Aluminium rose by 1.48 percent and 0.58 percent respectively on MCX.

The Philadelphia Federal Reserve Bank said its business activity index rose sharply to minus 2.2 in June from minus 22.6 in May. That was the highest reading since September 2008.

HudBay Minerals will close its aging Flin Flon, Manitoba, copper smelter before July 2010 and its While Pine, Michigan, refinery shortly thereafter, the company said on Thursday, citing the deteriorating economics of the operations.

Canceled warrants in Copper-- metal set to leave warehouses -- continued to drop, standing at 17,125 tonnes Wednesday, or a little more than 6 percent of total warehouse inventories.

Base metals ended higher the last day after recovering from the early losses. Better than expected reports from the U. S. supported the prices of base metals. We do not see any fundamental support in base metals from here on the back of prevailing demand concerns. We expect base metals to trade sideways to down during the day and any appreciation in dollar may add pressure on the prices. We do not recommend buying.