Zinc on Wednesday settled up 0.6% at 118.05 as German and French economic data boosted market sentiment. Euro zone Q2 GDP rose by 0.3%, topping expectations, while US July PPI fell short of forecasts, undermining the likelihood that the US Federal Reserve will taper off QE3 anytime soon. German and French Q2 GDP rose by 0.3% and 0.2% respectively, and euro zone Q2 GDP fell by 0.7%, better than the forecast of a 0.8% decline and a decline of 1.1% in Q1, but the euro against the US dollar only rose by over ten basis points. US PPI in July rose by 2.1%, lower than the forecast and June. That is because of falling gasoline prices in July. Excluding food and gasoline prices, core PPI in July rose by 1.2%, the lowest since November 2010. Some market players believe the US Federal Reserve should be cautious as extremely low inflation rate may cause goods prices and salaries to fall, and will lead to deflation. China's power consumption in July was up 8.8% YoY, 2.5 percentage points higher than June, and up 4.3 percentage points compared to the same period last year. This, when combined with strong commodity transportation and new-increased loans in July, market confidence towards China's economic recovery grew. Technically market is under fresh buying as market has witnessed gain in open interest by 7.56% to settled at 4525 while prices up 0.7 rupee, now Zinc is getting support at 116.9 and below same could see a test of 115.75 level, And resistance is now likely to be seen at 118.75, a move above could see prices testing 119.45.

Trading Ideas:

Zinc trading range for the day is 115.8-119.5.

Zinc ended with gains as German and French economic data boosted market sentiment

Euro zone Q2 GDP rose by 0.3%, topping expectations, while US July PPI fell short of forecasts

Zinc daily stocks at Shanghai exchange came up by 1200 tonnes