Byline: Ratna Ganguli

KOLKATA: Better than expected US economic data, sudden fall in London Metal Exchange (LME) inventories and opportunistic buying are expected to lift the market sentiment in some base metal counters, although the base metal complex on the whole is expected to demonstrate a

Shrugging off a week-long losing streak, zinc and nickel prices have managed to lift off the lows in the early part of the current week. This has taken place following revival of bargaining in these two counters.

At the same time, copper and tin prices have reported a marginal decline, while price stability continued to rule aluminium and lead counters.

Market watchers feel traders are expected to remain cautious while taking a long call in any of the counters in the base metals complex.

This follows a major correction in prices of almost all metals last week.

Traders having exposure in both the domestic and metals markets can drop their guards in case of those metals whose LME inventories are gradually shrinking, they said. In the past couple of days, inventories in LME fell for almost all metals except lead and aluminium.

Taking the cue from the nearly 114-tonne dip in nickel inventories on LME, nickel increased marginally on Tuesday to Rs 943.50 per kg, while its far-month August contract has increased a little over 1% to Rs 972 per kg before touching a high of Rs 974 for the July contract.

It clocked a significant business volume of 4,076 lots on the day.

A section of traders feel that buying interest in copper is likely to emerge on the back of better than expected US economic data and a 1,000-tonne drop in its inventory on LME on Tuesday.

But there is another group which holds a different view. They feel that despite the hope of a turnaround in the US manufacturing activities, global trade data suggests that construction spending in that country according to consensus estimates is expected to decline 0.5% in the current month.

Caught between the two market views on copper, the base metal spot price has lost one rupee to finish at Rs 334.90 per kg on MCX.

Angel Commodities also takes a different view on copper. It estimates that riding on the back of redevelopment and construction activities in China, the recent price correction will see a revival in demand for the metal, which may lead the copper price to rise to as high as $8,200 per tonne by the weak-end from the Monday figure of $7,920 per tonne.