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Updates throughout, adds London dateline
LONDON, March 16 (Reuters) – Copper prices rose on Thursday from a 10-week low the day before as central bank support for embattled bank Credit Suisse eased fears of further turmoil in the banking sector.
European markets rebounded after the 50 billion Swiss franc ($54 billion) lifeline to Credit Suisse, whose troubles followed the collapse of two mid-sized U.S. lenders last week. MKTS/GLOB
Financial industry stress has raised fears of more bank failures and weaker economic growth.
Benchmark copper CMCU3 on the London Metal Exchange (LME) was up 0.6% at $8,559 a tonne at 1111 GMT after falling 3.7% on Wednesday, its biggest single-day slide since July.
The metal used in electrical wiring was hovering just below its 100-day moving average, which could become a technical resistance level.
“With the loss in confidence, you get an effective credit tightening … every risk asset out there is seeing some sort of damage,” said WisdomTree analyst Nitesh Shah.
A risk-averse mood on wider markets could hold copper prices down but the metal’s fundamentals remain strong, Shah said, pointing to rising demand in China and planned spending globally on electrification and infrastructure.
In China, the biggest consumer, Yangshan copper import premiums have begun to rise, pointing to improving demand. SMM-CUYP-CN
Markets were awaiting interest rate decisions from the European Central Bank on Thursday and the U.S. Federal Reserve later this month.
Turmoil in the banking sector may see one or both central banks shy away from rate rises that would restrict economic activity.
On the supply side, First Quantum Minerals FM.TO has resumed operations at its Cobre Panama copper mine, streaming company Franco-Nevada Corp FNV.TOsaid on Wednesday.
LME aluminium CMAL3 was down 0.2% at $2,273.50 a tonne, zinc CMZN3 fell 0.4% to $2,854, nickel CMNI3 rose 0.1% to $23,030, lead CMPB3 slipped 0.1% at $2,066 and tin CMSN3 was down 2.7% at $21,860.
(Reporting by Peter Hobson Additional reporting by Mai Nguyen in Hanoi; Editing by Chizu Nomiyama)
((peter.hobson@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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