Zinc settled down -0.77% at 122.85 with slowing factory growth in top consumer China and the United States compounding a deteriorating demand outlook for the metal. China's factory growth eased to an expected six-month low in January, hurt by weaker local and foreign demand, heightening worries of an economic slowdown. Also, growth in China's services sector slowed to a five-year low in January. In the United States meanwhile, data showed manufacturing activity slowed sharply in January on the back of the biggest drop in new orders in years, suggesting the economy lost steam at the start of 2014. The economic picture was also darkened by other U. S. data on Monday showing spending on construction projects barely rose in December. Trade volumes were thin, however, with China's stock, bond, foreign exchange and commodity futures markets closed from Jan. 31 through Feb. 6 for the Lunar New Year holiday. Meanwhile, market players continued to monitor liquidity conditions in emerging markets, such as Turkey and South Africa. Emerging markets economies have been hard hit in recent sessions by worries over the impact of cuts in Federal Reserve stimulus and concerns over a slowdown in China. Investors looked ahead to key U. S. economic data later in the day to gauge the strength of the economy and for further indications on the future course of monetary policy. Technically market is under fresh selling as market has witnessed gain in open interest by 4.85% to settled at 2161 while prices down -0.95 rupee, now Zinc is getting support at 122.3 and below same could see a test of 121.7 level, And resistance is now likely to be seen at 123.6, a move above could see prices testing 124.3.

Trading Ideas:

Zinc trading range for the day is 121.7-124.3.

Zinc dropped with slowing factory growth in China and US compounding a deteriorating demand outlook for the metal.

Data showed China's official manufacturing PMI fell to a six-month low of 50.5 in January from 51.0 in December.

Market players continued to monitor liquidity conditions in emerging markets, such as Turkey and South Africa.