Zinc settled up 0.59% at 126.95 recovered from the last weeks falls amid mixed China's import data. Yesterday support seen as Germany's January IFO business climax index rose to the highest level since 2011, and pushed up LME zinc prices to a high of USD 2,033/mt. Nevertheless, US December new home sales fell surprisingly, and expectations of the US Federal Reserve's QE tapering put a dent in market sentiment. While upto last week pressure was there as purchases of refined zinc dropped annualized 8.62% in December but rose 21.52% in 2013. Meanwhile, imports of zinc alloy jumped 10.43% year-on-year in December but plunged 4.09% last year. Persistently falling LME inventories propped up zinc futures. LME supplies slumped 1.15% last week. Markets are worried that the Fed will continue dialing down its QE stimulus program in this week's interest rate meeting, and capital outflows from emerging markets resulted in a slump in global shares. The US dollar index leveled off in the wake of declines, exerting downward pressure on base metals prices. Technically market is under short covering as market has witnessed drop in open interest by -16.33% to settled at 1660 while prices up 0.75 rupee, now Zinc is getting support at 126.1 and below same could see a test of 125.1 level, And resistance is now likely to be seen at 127.9, a move above could see prices testing 128.7.

Trading Ideas:

Zinc trading range for the day is 125.1-128.7.

Zinc gained supported by rupee weakness and after data showed Germany's January IFO business climax index rose to the highest level since 2011

US December new home sales fell surprisingly, and expectations of the US Federal Reserve's QE tapering limited the gains

Zinc daily stocks at Shanghai exchange came up by 948 tonnes