Base metal prices ended lower despite positive housing starts and building permits data from US as investors might have preferred to take some money off the table before the Chinese holiday (from Sep 22-24). US equity markets ended flat after the FOMC kept interest rate unchanged. The Fed remained concerned about deflation and indicated that it is prepared to take further steps if the economic outlook deteriorates significantly. However there was no immediate announcement of any quantitative measures. As a result, the dollar index fell and US treasuries ended higher. Most of Asian equities have opened on the higher side. In the morning session on LME, base metals are trading modestly higher. Dollar index continues to remain weak. On the economic data front, Euro-zone industrial orders for the month of July are expected to decline as against growth in the prior month and houses prices in US are also expected to continue their declining trend. Both of these are negative for base metal prices. Indian rupee is also expected to trade with strength and thereby will add further to the pressure on prices. Overall, we at KCTL expect base metal prices to trade lower.

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