Zinc settled up 0.63% at 127.75 on short covering after prices dropped on concerns about China's economic recovery following news that growth in the services sector had slowed. US November factory orders rose 1.8%, in line with market expectations, but December ISM non-manufacturing PMI unexpectedly fell, pushing down the US dollar index.  The HSBC’s China service PMI was reported at a 28-month low in December due to weakening demand by year’s end, reflecting slower expansion in China’s service sector. The four major PMI data for China fell in tandem for the first time since April 2013, rekindling concerns over China’s slowdown. Sources disclosed that China’s authorities issued notice on control over shadow banking, also weighing on the market. Market players were still waiting for the minutes from Fed’s December policy meeting the December nonfarm payroll report. The Senate confirmed Janet Yellen on Monday as the next leader of the Federal Reserve. In the US, November factory orders grew by 1.8% on the month to USD 497.9 billion, the highest since 1992. However, ISM non-manufacturing PMI as 53.0, lower than the 54.7 expected and 53.9 for November. In this context, the euro bottomed out against the dollar. Technically market is under fresh buying as market has witnessed gain in open interest by 11.93% to settled at 3161 while prices up 0.8 rupee, now Zinc is getting support at 126.6 and below same could see a test of 125.3 level, And resistance is now likely to be seen at 128.5, a move above could see prices testing 129.1.

Trading Ideas:

Zinc trading range for the day is 125.3-129.1.

Zinc gained on short covering after prices dropped on concerns about China's economic recovery following news that growth in the services sector had slowed

US November factory orders rose 1.8%, in line with market expectations, but December ISM non-manufacturing PMI unexpectedly fell

Zinc daily stocks at Shanghai exchange came down by 74 tonnes