Copper's gains bucked a more than 1-percent drop in US equities and a rallying dollar versus the euro, as demand fundamentals reemerged from the shadows of Europe's festering debt crisis, which continued to wreak havoc on broader market sentiment. Global equities fell as investors, unnerved by an Italian bond auction, doubted the ability of newly formed governments in Italy and Greece to resolve the region's sovereign debt crisis. Instead, copper investors focused on Chinese demand prospects after the metal-consuming giant said it is pushing ahead with efforts to encourage the development of electric vehicles. The news helped give a firm boost to Asian equities and Shanghai copper prices. According to the Copper Development Association, an electric vehicle will use, on average, as much copper as a similar vehicle with an internal combustion engine. "You have all the additional wiring, the brushes within the electrical motor are all copper, and the powering infrastructure all says more copper," said Sterling Smith, an analyst for Country Hedging Inc. in St. Paul, Minnesota. London Metal Exchange (LME) three-month copper climbed $121 or 1.6 percent to end at $7,760 a tonne after rallying nearly 4 percent to an early session high of $7,933. In New York, the key December COMEX contract rose 2.45 cents to settle at $3.4880 per lb after moving between $3.4710 and $3.5855. Futures volumes were thin at the start of the trading week as European jitters persisted. About 44,000 lots traded in New York, almost a third below the 30-day norm, according to preliminary Thomson Reuters data. "It's difficult for people to form a strong view at the minute, for traders and also for consumers who tend to be very cautious, working with low stocks and delaying orders," said Standard Chartered analyst Dan Smith. Looking ahead, markets are expected to start focusing on an end-of-month deadline to increase the firepower of the bailout vehicle to 1 trillion euros ($1.36 trillion) - a move that could renew anxiety over the euro zone's prospects. EASING CREDIT A loosening policy stance on credit in China should be sufficient to boost demand for commodities such as copper, said Goldman Sachs in a note, as it maintained a buy call on June 2012 LME copper, although the position has lost money. "Although our long copper position opened in May 2011 remains substantially under water, our 12-month copper price target of $9,500/mt suggests substantial upside from current depressed levels," it said. "We emphasize that EM-led (emerging market) global economic growth, combined with material disappointments in copper production on weather disruptions, labour unrest and declining ore grades, suggest a continued deficit in the copper market in 2012," it added. Chinese banks wrote a much more-than-expected 587 billion yuan ($92.4 billion) of new loans in October, seen as evidence of selective policy easing by the government to keep the world's second-largest economy on an even keel. China, which accounts for about 40 percent of global copper demand, has picked up its buying of stocks of the metal, although concerns persist that the euro zone debt crisis might knock its exports. The latest LME data showed copper stocks held in its global warehouses fell by 2,300 tonnes to 405,400 tonnes - their lowest since mid-February and down more than 70,000 tonnes from their mid-summer highs. Supply-side prospects for copper also continued to underpin prices. Production at the Grasberg mine in Indonesia has ground to a halt due to a strike, forcing its owner and operator, Freeport-McMoRan, to declare partial force majeure.