Copper bounces off 6-year low after China stocks rally 3.7%
Investing.com – Copper prices bounced off the lowest level in more than six years on Tuesday, as sentiment was boosted after China’s stock market rallied on news that authorities have stepped up their crackdown on short-selling.
for September delivery on the Comex division of the New York Mercantile Exchange tacked on 1.8 cents, or 0.78%, to trade at $2.364 a pound during European morning hours.
A day earlier, copper tumbled to $2.321 a pound, a level not seen since June 2009, before ending at $2.346, down 1.7 cents, or 0.74%, after a pair of reports on China’s manufacturing sector fueled concerns over a deepening slowdown in the world’s second largest economy.
The took investors on another volatile ride on Tuesday, with shares surging in the final hour of trade to end up 3.7% after officials announced fresh steps to rein in short-selling.
The index lost almost 15% in July despite the introduction of government-measures aimed at supporting the market.
Copper prices sank 25.1 cents, or 9.6%, in July, as steep declines on China’s stock market rattled investors’ confidence.
Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation’s demand for the industrial metal will decline.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere, for December delivery inched up 30 cents, or 0.03%, to trade at $1,089.70 a troy ounce, while for September delivery shed 2.0 cents, or 0.14% to trade at $14.49 an ounce.
Investors looked ahead to the release of key data later in the session for further indications over the timing of a U.S. rate increase and the strength of the economy.
The U.S. is to release data on factory orders later Tuesday. Market players are also focusing on Friday’s nonfarm payrolls report.
Data on Monday showing that weakened in July and rose at its slowest pace in four months in June did little to alter expectations for a September rate hike.
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