May 27 (Bloomberg) -- Copper and zinc climbed for a second day, and aluminum advanced, as financial markets stabilized and the dollar fell on signs that the global economic recovery was gaining momentum.
Three-month copper on the London Metal Exchange gained as much as 0.8 percent to $6,835 a metric ton, and traded at $6,832 at 1:08 p.m. in Singapore, reversing a decline of as much as 0.7 percent. Prices are still down 8.1 percent in May, the worst monthly performance since January. Futures in Shanghai fell as much as 1 percent to 54,310 yuan ($7,952) a ton, and were at 54,740 yuan at the midday break.
Japan's exports grew for a fifth month in April by more than economists expected, while new-home sales in the U.S. climbed to the highest level in two years and durable-goods orders beat forecasts.
The benchmark MSCI Asia-Pacific Index climbed 1.6 percent, gaining for a second day, while the euro increased 0.8 percent, snapping a three-day drop against the dollar. Dollar-denominated commodities tend to move inversely to the U.S. currency.
"Economic data in the U.S. and elsewhere suggests the recovery is on track," Zhang Lei, an analyst at CES Futures Brokerage Co., said from Shanghai. "However as long as the European situation remains, it won't be a smooth ride up and we could even see markets move lower."
"We're getting positive economic data out of the U.S. and other parts of the world," Lu Youzhong, an analyst at China Lu Youzhong, an analyst at China Futures Co., said from Chongqing today. "However, risk aversion sentiment is still quite high among investors. That's why the rebounds we've seen in the past month have been lackluster."
China's State Administration of Foreign Exchange has met with foreign bankers because of concern about exposure to Europe, the Financial Times reported, without saying where it got the information. The head of the Chinese sovereign wealth fund said he plans to keep investments in Europe even after the euro's decline, Reuters said. China Investment Corp. had debated whether to lower the percentage of assets it allocates toward the continent, Reuters said, citing President Gao Xiqing.
Aluminum in London rose 0.5 percent to $2,024 a ton, zinc advanced 0.8 percent to $1,905 a ton, and lead added 1.8 percent to $1,785 a ton. Nickel climbed 1.6 percent to $21,450 a ton, while tin was little changed at $17,600 a ton.