Copper settled flat at 451.40 as gains where capped after a manufacturing gauge for China declined more than estimated, damping demand prospects in the world's biggest user of metals. The preliminary February reading of 48.3 for a Purchasing Managers' index released today by HSBC Holdings Plc and Markit Economics compares with January's final figure of 49.50. On Wednesday, concerns over tighter monetary policies in China kept LME copper prices in check early in the session. Reports from the US turned out mixed, while investors only watched from the sidelines before release of minutes from Fed's January policy meeting and given China's manufacturing PMI scheduled for release on Thursday. US stocks thus fell across the board. LME copper prices showed increasing volatility, with highest and lowest price at USD 7,220/mt and USD 7,168/mt. LME copper finally ended slightly lower at USD 7,174/mt. Minutes from the Fed's policy setting meeting published after the close showed the Fed may revamp forward guidance as the unemployment rate nears its threshold of 6.5%. Fed officials agreed unanimously to continue to scale back the asset purchase program, causing many financial firms to lower US growth forecasts. The resultant rebound in the US dollar index may weigh the market on Thursday. Technically market is under short covering as market has witnessed drop in open interest by -7.2% to settled at 8660 while prices up 0.2 rupee, now Copper is getting support at 450 and below same could see a test of 448.4 level, And resistance is now likely to be seen at 453.2, a move above could see prices testing 454.8.

Trading Ideas:

Copper trading range for the day is 448.4-454.8.

Copper settled flat as worries about tighter monetary policy in China and weaker growth in the United States kept a lid on prices.

Fed officials agreed unanimously to continue to scale back the asset purchase program, causing many financial firms to lower US growth forecasts.

The report showed that U. S. housing starts plunged by 16% in January to hit a seasonally adjusted 880,000 units from December's total of 1.048 million