Nickel settled down by -3% at 763.9 as sliding oil prices and perceptions that a post-U.S. election rally had become overstretched prompted selling. China's National Development and Reform Commission (NDRC) has approved a 247-billion-yuan railway plan to link Beijing to neighbouring cities. The drastic change in market's supply fundamentals on account of ban on nickel mine production by the Philippines administration led to sharp rally in Nickel prices during recent months. The rally in prices was further aided by improved demand from China. The Philippines government had initiated mining inspections in an attempt to identify those mines that violate environmental and social regulations. Although it was doubtful whether the government will impose bans, the government did actually impose fines and mining suspensions on 18 nickel mines. The knee-jerk reaction following suspension of mining activities led to rally in Nickel prices. According to recent statistics released by the International Nickel Study Group (INSG), the global nickel market has reported production deficit of 52,600 tonnes during the initial three quarters of the current year. This is in comparison with a surplus of 74,800 tonnes during the corresponding nine-month period in 2015. Key economic data on US inflation and employment are due to be released this week. Any positive surprise may prompt a renewed wave of US government bond selling, pushing yields higher. Technically market is under long liquidation as market has witnessed drop in open interest by -16.66% to settled at 4786 while prices down -23.6 rupee, now Nickel is getting support at 750.8 and below same could see a test of 737.6 level, And resistance is now likely to be seen at 781.1, a move above could see prices testing 798.2.

Trading Ideas:

Nickel trading range for the day is 737.6-798.2.

Nickel dropped as sliding oil prices and perceptions that a post-U.S. election rally had become overstretched prompted selling.

Japan's industrial output rose 0.1 percent in October from the previous month and manufacturers say production likely bounced sharply this month.

China's NDRC has approved a 247-billion-yuan railway plan to link Beijing to neighbouring cities.