Copper rises as dollar wilts, equities surge

Copper rose on Tuesday as the dollar fell and European equities surged to a 28-month high on signs of improving economic growth and better prospects for industrial metals demand. Three-month copper on the London Metals Exchange rose 1.2 per cent to $9,715 a tonne by 0959 GMT, after closing on Monday at $9,630 a tonne. The metal used in power and construction hit a record high of $9,754 on January 4. Nickel rose 2.3 per cent to $26,398 from Monday's $25,835 a tonne close.

"Risk sentiment is looking good," Danske analyst Christin Tuxon said, citing the weaker dollar and resurgent stock markets, which focussed on postive earnings reports. AT 1110 GMT, the FTSEurofirst 300 index of top European shares was up around 1 per cent at 1,168.85 points after rising as high as 1,168.99. The index is up 4 per cent this year after rising more than 7 per cent in 2010. Tuxon said metals markets also took comfort from an International Energy Agency report, which said world oil demand growth will be higher than initially expected in 2011. "This is feeding through to an increasing trust in global demand and that's something that the metals market likes," she said.