SHANGHAI: Copper edged up on Wednesday after a report that Europe will strengthen the region's rescue fund boosted investor confidence, while strikes at two Freeport-McMoran Copper & Gold mines also supported prices.
Gains may, however, be capped by concern that the euro-zone debt crisis may drag on after Moody's Investors Service cut Spain's sovereign ratings.
FUNDAMENTALS
Three-month copper on the London Metal Exchange edged up 0.01 percent to $7,450 a tonne by 0119 GMT, after dropping 0.6 percent in the previous session.
The most-active December copper contract on the Shanghai Futures Exchange rose 2.1 percent to 55,140 yuan ($8,640.873) per tonne, after falling 3.7 percent in the previous session.
Britain's Guardian newspaper reported on Tuesday that France and Germany had agreed to boost a euro zone financial rescue fund to 2 trillion euros ($2.76 trillion), pushing US stocks and the euro higher despite doubts about whether there was such an agreement.
Freeport has threatened to close its Grasberg mine in Indonesia where workers are striking -- a move that would hurt the company's bottom line and could further tighten global copper supplies and drive up the metal's price. It is due to announce its earnings at 1400 GMT.
Talks between Freeport's Cerro Verde mine in Peru and union leaders were scheduled for Thursday in what would be a final bid to end a 20-day-old pay strike, a regional government official said on Tuesday.
Doubts cast on France's triple-A credit rating by Moody's raised uncertainty over Europe's hopes of drawing a line under its sovereign debt crisis, five days before a crucial EU summit.
Moody's on Tuesday cut Spain's sovereign ratings by two notches, saying high levels of debt in the banking and corporate sectors leave the country vulnerable to funding stress.
MARKET NEWS
Asian shares rose on Wednesday, but gains were capped by a cut to Spain's sovereign credit rating from Moody's that kept investors' risk appetite in check.
The euro inched lower on Wednesday, giving up some gains made on a report that France and Germany have reached a deal to bolster the euro zone's bailout fund.
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