MARKET RECAP Base metal prices ended on a mixed note on Tuesday, but the complex largely ended in the green. Markets now await economic data from the US - building permits and housings starts are due today, with leading indicators and the Philadelphia Fed index rounding out on Friday. Aluminum inventories on the LME gained sharply as the usual warranting against third Wednesday saw large inflows into the US warehouses. The total LME inventories touched fresh record high of 6.27 million tonnes. Copper inventories resumed their uptrend as they gained 3300 tonnes and touched 526,750 tonnes. Inventories of the red metal have touched a new high since March 2009. Copper prices ended in the positive territory on Tuesday as continued Chinese buying against a favorable Shanghai-London arbitrage continued to provide upside support to prices. On the macroeconomic front, the Dollar Index gained on Tuesday despite gains in equities and markets opted for the currency ahead of uncertainty regarding further economic data announcements in the week. International demand for long-term US stocks, bonds and financial assets rose in November as investors purchased a record number of government securities. Net buying of long-term equities, notes and bonds totaled $126.8 billion for the month, compared with $19.3 billion in October. A series of Chinese economic releases are expected on Thursday, including GDP, industrial output and detailed trade data, which are expected to show the economy strengthened in December. China's fourth-quarter GDP is forecast to grow 10.5 percent year-on-year, after growth of 8.9 percent in the third quarter. An inflation report is expected to show a 1.4% gain in consumer prices last month. This would be the sharpest increase since February 2008 and may prompt a new response from China’s central bank. Base metal prices could come under pressure if the dollar remains strong. But metals will also take cues from the economic data from the US today. Positive data could lead to higher base metal prices. On the macroeconomic front, the US is expected to announce data building permits, housing starts, PPI and Core PPI today. Positive economic data could raise risk appetite in the financial markets and lead to higher base metal prices. Copper Copper prices are up with immediate support for MCX February contract seen at Rs.344.50. Further below, crucial support is seen at 341.30 levels. Whereas resistance is seen at Rs.349.65 levels & further upwards at Rs. 351.60 levels. Zinc Zinc prices are trading up with immediate support seen at Rs.113.35 levels for MCX January contract whereas crucial support is seen at Rs.111.80 level. Short-term resistance is seen at Rs.115.90 whereas major resistance is seen at Rs 116.90 levels.

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