Yesterday, base metal prices witnessed sharp fall as disappointing economic data from China and the U.S. painted a bleak picture of demand for the industrial metal.
Owing to weak economic data LME metal counter sank by almost 4% as copper prices declined by 4% and zinc prices erased by almost 5%.
Today, prices recovered on short covering amid ECB's lending of 132 billion Euros to banks. The European Central Bank said it will lend banks
131.9 billion euros ($161.5 billion) for three months, less than economists had forecast as a landmark year-long loan expires.
Banks tomorrow need to repay 442 billion euros in 12-month funds, the biggest amount ever awarded by the ECB and a key plank in its efforts to fight the financial crisis last year.
Adding to worries about the health of the global economy, Japan reported that industrial production slipped 0.1% in May, while household spending fell 0.7%.
The Conference Board, a private research group, said its index of consumer confidence for June dropped to 52.9 compared with the 62.7 seen in May which was far below economists' expectations for 62.5.
The Conference Board leading economic index for China was revised down to 0.3% in April from a first estimate of 1.7% after what the Conference Board described as a calculation error.
This adds further evidence of a moderating Chinese economic growth outlook. This puts further pressure on the PMI survey data released on July 1.
Technical View
MCX Copper (Aug) has strong support at 302 with resistance at 308.
Nickel prices facing resistance at 915 with support at 890.
Zinc support lies at 82 and resistance at 83.20.
Lead prices today may trade with positive bias. Above 81.50 prices may rise to 83 level.
