India copper futures extended gains on Thursday afternoon, supported by a fall in stockpiles in the London Metal Exchange, but a strong rupee kept a lid on gains, analysts said. The benchmark April contract MCCJ9 was 2.02 percent higher at 199.20 rupees per kg at 3:43 p.m. Copper stocks in the London Metal Exchange (LME) fell by 1,700 tonnes to 493,450 tonnes on Thursday. See [ID:LME/STX1] A plan by the U.S. Federal Reserve to buy long-term treasury bonds on a large scale to fight recession may also improve the demand outlook for copper by enhancing credit availability, and may push the red metal even higher, analysts said. "Copper may go up to 205/210 by the time U.S. markets open," said Somnath Dey, in-charge metals and energy research in Noida. It "may touch 225 rupees level in the next 10 days on dollar weakening and bargain hunting," he added But, traders were also eyeing the currency markets, where the rupee strengthened against the dollar, weighing on prices. A strong rupee makes the dollar-quoted asset cheaper. The Indian rupee strengthened past 51 against the dollar for the first time in three weeks as a stocks rebound drew foreign portfolio inflows. See [ID:nBOM461464] Shrinking canceled warrants is another cause of concern, said Vishal Maniyar, an analyst with Karvy Comtrade in Hyderabad. Canceled warrants -- material earmarked for delivery -- fell to 22,650 from 23,475 tonnes on Thursday, suggesting less metal will be leaving warehouses. See [ID:MCUSTX-TOT] At 3:44 p.m., March zinc MZIH9 was 1.16 percent higher at 61.25 rupees, and March lead MLDH9 was 0.90 percent higher at 67.10 rupees per kg.

Source