Aluminium settled up 1% at 111.2 buoyed by encouraging economic data. HSBC's final China manufacturing PMI came in at 50.5 in December. The figure, though down from November, did stay above 50 for five months in a row.

The euro zone's manufacturing PMI for December finalized at 52.7, consistent with forecasts and hitting a 31-month high. Besides, US construction spending rose by 1.0% MoM in November, above market forecast of 0.6%. These positive US economic data pushed up the US dollar index back to 80.5. The HSBC China manufacturing PMI for December was finalized at 50.5, on par with the preliminary reading and touching a three-month low.

However, the index has remained above 50 for a fifth month straight, a sign of continued expansion of Chinese manufacturing. New export orders sub-index fell below 50 for the first time in four months to 49.1, due to waning demand overseas during the Christmas and New Year period. As the lower index was primarily attributable to seasonal factor, metals markets were little affected and staged continuous rises during Asian trading hours, an indication that investors were still optimistic on Chinese manufacturing.

Although the New Year holiday and suspension of PBOC's open market operations lately upset the market, liquidity conditions improved some helped by fiscal deposits and due to completion of year-end regulatory review of banks' loan-to-deposit ratio. Technically market is under fresh buying as market has witnessed gain in open interest by 2.3% to settled at 1910 while prices up 1.1 rupee, now Aluminium is getting support at 110.4 and below same could see a test of 109.5 level, And resistance is now likely to be seen at 112.2, a move above could see prices testing 113.1.

Trading Ideas:

Aluminium trading range for the day is 109.5-113.1.

Aluminium prices ended with gains buoyed by encouraging economic data

US initial jobless claims dropped for a second straight week last week, a sign of resilience in the US economy.

Aluminium daily stocks at Shanghai exchange came down by 100 tonnes