Aluminium yesterday settled up 1.88% at 113.65 as market rallied on fresh buying as market has witnessed gain in open interest by 4.28% to settled at 3189 while prices up by 2.1 rupee tracking LME aluminum which opened at USD 1,869.3/mt and climbed to USD 1,904.8/mt to settled up by +0.83% at USD 1,887.5/mt amid hopes policy makers in Beijing will introduce fresh stimulus measures to boost growth in the world's second largest economy. Spot aluminum stocks in China continued to drop, which is a sign of higher demand this year compared with years past. Positive effect from strong Chinese economic data began to wane as investors began to reconsider demand prospects from the world's second largest economy. Markets are cautious ahead of the upcoming US retail sales data scheduled for release tomorrow. US stocks were mixed and the US dollar index bounced back, putting downward pressure on commodity prices. It was reported that Chinese government had provided financial support to major domestic provinces and cities. The Agricultural Bank of China has signed a contract with Shanghai government that it will provide RMB 250 billion loans to the Disney Land and Free Trade Zone projects. The market expects other state-owned banks will also imitate the Agricultural Bank of China to secure the 7.5% economic growth target this year, boosting the market. Now Aluminium is getting support at 111.70 and below same could see a test of 109.90 level, And resistance is now likely to be seen at 114.80, a move above could see prices testing 116.10.

Trading Ideas:

Aluminium trading range for the day is 109.9-116.1.

Aluminium ended with gains tracking firmness in other base prices and amid other commodity prices

Spot aluminum stocks in China continued to drop, a sign of higher demand this year compared with years past.

Aluminium ingot inventories at three major Japanese ports fell about 6.3% month-on-month in July