Zinc on MCX settled up 1.78% at 165.4

Zinc on MCX settled up 1.78% at 165.4 tracking LME prices closing up 1% at $2,550, rising above its 200-day moving average after prices dropped due to mounting China steel inventories. Expected shortages of zinc, a metal often favored by speculators, may not materialize this year because recent price gains have spurred miners around the world to increase output.

Zinc was the best performer on the London Metal Exchange last year with a surge of 60 percent and many investors and analysts had pegged the metal as their top pick for 2017. It had gained as much as 16 percent by mid-February, but has given up most of those gains as some speculators got cold feet. Premiums for physical refined zinc in top consumer China, based on levels in Shanghai warehouses, have slipped 15 percent so far this year to $110 per tonne, showing that refined metal supplies are healthy.

Prices in China's sizzling property market accelerated in March on a monthly basis, while the International Monetary Fund raised forecasts for China's economic growth in 2017 and 2018. U.S. mortgage application activity fell last week despite a decline in borrowing costs on 30-year home loans to their lowest levels in nearly five months, Mortgage Bankers Association data released on Wednesday showed.

Confidence among Japanese manufacturers has risen for an eighth straight month to a level not seen since before the 2008 global financial crisis, a survey found, reflecting output and export gains led by overseas economic recovery. Technically market is under short covering as market has witnessed drop in open interest by -4.02% to settled at 4661, now Zinc is getting support at 163.1 and below same could see a test of 160.8 level, And resistance is now likely to be seen at 166.7, a move above could see prices testing 168. 
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Suhani Verma

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