Zinc settled up 0.2% at 123.75 despite of appetite for riskier assets weakened following the release of disappointing Chinese manufacturing data. Data released earlier showed that China's final HSBC PMI ticked down to 48.1 in April from a preliminary reading of 48.3 and below expectations for a reading of 48.4. Zinc prices posted solid gains this month, rising by almost 4% in April partly on account of improving fundamentals and on perceptions that the Chinese government is keen to avoid a slowdown, which may explain why it announced plans to speed up construction of railway lines and highways this month. Strong demand for Chinese zinc financing deals also contributed to the gains; the latest trade data shows that China took in 68,000 tons of refined zinc in March, almost double the 38,000 tons in February and a good indication that most of this metal will go into financing deals as opposed to consumption. The big in-take could also partially explain why LME zinc stocks have fallen by about 41,000 tons so far this month against a backdrop of a tightening market. In this regard, the ILZSG reports that zinc was in a 6,000-ton deficit in January to February, while for the year as a whole, the Group expects a 117,000 ton deficit. Meanwhile, market players continued to assess a report showing that the U.S. economy added jobs at the fastest pace in more than two years in April, but also showed weaker earnings growth and a drop in labor force participation. Technically market is under fresh buying as market has witnessed gain in open interest by 5.97% to settled at 1474 while prices up 0.25 rupee, now Zinc is getting support at 123.1 and below same could see a test of 122.5 level, And resistance is now likely to be seen at 124.3, a move above could see prices testing 124.9.

Trading Ideas:

Zinc trading range for the day is 122.5-124.9.

Zinc edged up supported by steady local demand and on hopes of the U.S. economy gaining speed.

Market players continued to assess a report showing that the U.S. economy added jobs at the fastest pace in more than two years in April

Zinc daily stocks at Shanghai exchange came down by 726 tonnes