SHANGHAI, June 7 (Reuters) - Copper rose 0.6 percent on Thursday on cautious optimism that European leaders were seeking a solution for ailing Spanish banks and as hopes rise for that the U.S. central bank will introduce measures to boost its economy.
All eyes are on United States Federal Reserve Chairman Ben Bernanke's testimony in front of a congressional committee later in the session for signals that the central bank will extend its current monetary stimulus programme.
Copper is also likely to get a boost after China said it would postpone until January introducing tougher capital requirements for its banks to help the already slackening economic growth.
Three-month copper on the London Metal Exchange rose 0.6 percent to $7,454.25 a tonne by 0116 GMT, after gaining 0.7 percent on Wednesday.
The most-active September copper contract on the Shanghai Futures Exchange edged up 0.6 percent to 54,160 yuan ($8,500) a tonne, after ending the prior session 0.6 percent higher.
Germany and European Union officials are urgently exploring ways to rescue Spain's debt-stricken banks although Madrid has not yet requested assistance and is resisting being placed under international supervision, European sources said on Wednesday.
Hopes of the officials coming up with a rescue plan outweighed disappointment over the European Central Bank announcement that it will not take near-term action to solve the bloc's debt crisis but instead expected governments to do more.
Two influential Federal Reserve officials say they are prepared to take even more policy action to boost the erratic U.S. economic recovery.
Although neither indicated that they want to pull the trigger now, the comments bolstered hopes that the world's largest economy will not end its current monetary easing programme when it ends at the end of the month.
U.S. economic data released on Wednesday was a mixed bag with the Fed's Beige Book showing economic growth picking up over the last two months and hiring showing signs of a "modest increase," whereas the Labor Department's report showed business productivity falling more than expected in the first quarter.
China will delay bringing in tougher capital requirements for its banks until January to avoid squeezing credit conditions and being a further drag on already slackening economic growth.
Asian shares rose on signs European policymakers were seeking a solution for ailing Spanish banks and amid growing expectations for additional monetary stimulus if major economies deteriorate further.
The euro hovered near two-week highs against the greenback early in Asia, while the Australian dollar rose towards parity on hopes of the European rescue for Spanish banks.
1100 Britain BOE policy decision Jun
1230 U.S. Jobless claims Weekly
1400 U.S. Federal Reserve Chairman Bernanke speaks
before congressional committee on U.S. economic outlook
Base metals prices at 0116 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7454.25 43.25 +0.58 -1.92
SHFE CU FUT SEP2 54160 340 +0.63 -2.64
LME Alum 1985.00 6.00 +0.30 -1.73
SHFE AL FUT SEP2 15925 10 +0.06 0.54
HG COPPER JUL2 337.10 -0.80 -0.24 -1.89
LME Zinc 1892.00 13.00 +0.69 2.55
SHFE ZN FUT SEP2 14845 30 +0.20 0.34
LME Nickel 16124.00 24.00 +0.15 -13.82
LME Lead 1908.00 0.00 +0.00 -6.24
SHFE PB FUT 15120 75 +0.50 -1.11
LME Tin 19600.00 0.00 +0.00 2.08
LME/Shanghai arb 1111
Shanghai and COMEX contracts show most active months
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 6.3635 Chinese yuan)