May 8, 2012 / 3:06 AM / 5 years ago

Copper boosted by hopes of Spanish banks rescue

3 Min Read

A worker checks a shipment of copper inside the plant at the copper refinery of Codelco Ventanas in Ventanas city, about 164 km (101 miles) northwest of Santiago, April 16, 2012.Eliseo Fernandez

SHANGHAI (Reuters) - London copper rose on Tuesday as the London Metal Exchange resumed trading after a one-day holiday, with sentiment improving on hopes Spain would use public funds to bolster its struggling banks.

But investor mood remained cautious on persistent worries over the global economy, especially in the euro zone where elections in Greece cast doubts on the country's commitment to austerity measures. Key China data due this week is also expected to keep traders on their toes.

Fundamentals

* Three-month copper on the London Metal Exchange rose 0.5 percent to $8,216 a tonne by 9:14 p.m. EDT (0114 GMT), after falling 0.7 percent on Friday.

* The most-active August copper contract on the Shanghai Futures Exchange gained 0.4 percent to 57,820 yuan ($9,200) a metric tonne (1.1 ton), after falling 1.4 percent in the previous session.

* Rodrigo Rato stepped down on Monday as chairman of ailing Spanish lender Bankia SA (BKIA.MC), helping to clear the way for a rescue plan involving the use of public funds to help troubled Spanish banks. The government hopes this will persuade international investors of Spain's financial stability.

* But elsewhere in the euro zone, a first attempt to form a new Greek government collapsed in less than a day on Monday after a shock election which left gaping questions over the country's ability to avert bankruptcy and stay in the euro.

* Despite a rising chorus of opposition to Berlin's austerity policies that reached a crescendo in Sunday's elections in Greece and France, Germany is ruling out any substantive shift in its approach to Europe's debt crisis.

* China will release a slew of data for April this week, including figures for trade, inflation and industrial output.

* For the top stories in metals and other news, click <TOP/MTL>, <TOP/MACRO> or <MET/L>

Market News

* Shares and riskier assets recovered on Tuesday from the previous day's plunge, as sentiment improved on hopes Spain would use public funds to bolster its struggling banks, although wariness remained over Greece. <MKTS/GLOB>

* The euro slid across the board on Monday after the outcome of elections in Greece and France cast doubt on the political will and commitment to austerity plans regarded as key to tackling the euro zone debt crisis. <USD/>

Reporting by Carrie Ho; Editing by Jonathan Hopfner

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