Aluminium on MCX settled up 0.16% at 126.25 hold its gain tracking firmness from Three-month aluminium on the LME which climbed 0.8 percent to close at $1,960 a tonne, its strongest since May 2015. LME Aluminium hit its highest level in nearly two years on Wednesday, supported by optimism that China would carry out plans to cut supply and by a rebound in the oil price. China said it would require aluminium smelters to cut capacity by 30 percent over the winter heating months as part of its anti-pollution measures.
Also support seen after the activity in China's manufacturing sector likely grew for an eighth straight month in March as a surprise rebound in the property market added to a construction boom, boosting sales of building materials from steel to cement, a Reuters poll showed. Also Japan's aluminium premium for shipments during the April to June quarter has been set at $128 per tonne, up about a third from the quarter before due to higher overseas prices, five sources directly involved in the pricing talks said on Wednesday.
Meanwhile data from US consumer confidence surged to a more than 16-year high in March amid growing labor market optimism while the goods trade deficit narrowed sharply in February, indicating the economy was regaining momentum after faltering at the start of the year. Meanwhile, British PM Theresa May triggered Article 50 on Wednesday, the legal process by which Britain will leave the EU.
Article 50 gives the leaving country two years to negotiate an exit deal and once it's triggered, it can't be stopped except by unanimous consent of all member states. Technically market is getting support at 125.5 and below same could see a test of 124.7 level, And resistance is now likely to be seen at 126.9, a move above could see prices testing 127.5.