Zinc settled up 0.74% at 136.4 as support seen due to weakness in rupee despite macroeconomic data released yesterday was mixed. China's import data in June fell short of market expectations, but helped undermine negative effects from China's probe into financing fraud at the Port of Qingdao. But financing crisis at large shareholders of Portuguese banks caused global stocks markets to plunge limiting the upside. In the US, wholesale inventories and sales both missed expectations in May.

The country’s initial jobless claims for the week ending in July 5 fell by 11,000 to 304,000, below the estimated 315,000, with the four-week moving average hitting its lowest since August 2007. Meanwhile, China’s exports grew by only 7.2% in June, and the country’s imports rose by 5.5%, both short of expectations. China imported 350,000 mt of unwrought copper and copper semis in the month, down 7.9% and setting a low last seen in April 2013. The People’s Bank of China (PBOC) Governor Zhou Xiaochuan stated that the central bank will have its policy rate play a guiding role in the market via mechanisms on the monetary market, adding that the bank is preparing two or three sets of such tools.

He also added that these tools will require collaterals. Previously, the Pledged Supplementary Lending (PSL) was expected to replace the PBOC’s existing re-lending monetary tool to supply low-cost funds to commercial banks in infrastructure and public welfare spending. Technically market is under short covering as market has witnessed drop in open interest by -0.29% to settled at 6106 while prices up 1 rupee, now Zinc is getting support at 135.3 and below same could see a test of 134 level, And resistance is now likely to be seen at 137.3, a move above could see prices testing 138.

Trading Ideas:

Zinc trading range for the day is 134-138.

Zinc settled up as support seen due to weakness in rupee despite macroeconomic data released yesterday was mixed.

China's import data in June fell short of market expectations, but helped undermine negative effects from China's probe into financing fraud at the Port of Qingdao.

Zinc daily stocks at Shanghai exchange came up by 608 tonnes.