SHANGHAI, July 24 (Reuters) - London copper rose on Tuesday on short covering ahead of the release of data on Chinese factory activity, rebounding from a near one-month low in the prior session on worries that Spain's debt problems will undermine global demand for metals.
Fears over the euro zone crisis are expected to cap gains for the time being as investors also eye Italy's fragile financial markets and possible sovereign rating cuts of some of Europe's strongest economies, including Germany, by Moody's.
Three-month copper on the London Metal Exchange rose 0.7 percent to $7,452.50 per tonne by 0123 GMT. It fell to its lowest level since June 28 in the previous session.
The most active November copper contract on the Shanghai Futures Exchange rose 0.3 percent to 54,510 yuan ($8,500) per tonne after falling over 2 percent in the prior session.
Spain's economy sank deeper into recession in the second quarter, its central bank said on Monday, as investors spooked by a funding crisis in its regions pushed the country ever closer to a full bailout.
Investors stampeded out of Spanish bonds, whose yields soared to a euro-era high above 7.5 percent, while equities suffered sharp falls as euro zone confidence crumbled.
Moody's Investors Service on Monday changed its outlook for Germany, the Netherlands and Luxembourg to negative from stable as fallout from Europe's debt crisis cast a shadow over the euro zone's top-rated countries.
Ten Italian cities including Naples and Palermo face problems managing their finances, daily La Stampa reported on Monday, underlying growing concerns about the sustainability of local finances in the euro zone's third largest economy, echoing events in Spain.
China will step up efforts to boost the development of seven strategic emerging industries to cushion downward pressure on the world's second-largest economy, a senior official of the country's top planning agency said on Monday.
Asian shares were capped on Tuesday after the previous day's deep losses as a surge in Spain's borrowing costs, to levels seen as unsustainable, triggered alarms indebted regions could push the euro zone's fourth-largest economy to seek a bailout.
The embattled euro languished at multi-year lows versus the yen and greenback on Tuesday, having been dealt another setback after Moody's changed to negative its outlook for Europe's biggest economy, Germany.
0230 HSBC China manufacturing PMI flash
0645 France July Business Climate
0658 French July Flash Manufacturing, Services PMIs
0728 Germany July Flash Manufacturing, Services PMIs
0758 Euro zone July Flash Manufacturing, Services PMIs
0758 Euro zone July Flash Composite PMI
1245 Federal Reserve Chairman Bernanke speaks, Cincinnati, Ohio
1255 Redbook weekly U.S. retail sales
1258 U.S. "flash" Markit Manufacturing PMI for July
1400 Richmond Fed Manufacturing, Services indexes for July
2350 Japan Trade Data for June
2350 Japan Imports and Exports for June
Base metals prices at 0123 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7452.50 51.50 +0.70 -1.94
SHFE CU FUT NOV2 54510 140 +0.26 -2.01
LME Alum 1882.00 4.00 +0.21 -6.83
SHFE AL FUT OCT2 15385 30 +0.20 -2.87
HG COPPER SEP2 338.10 0.10 +0.03 -1.60
LME Zinc 1824.00 10.00 +0.55 -1.14
SHFE ZN FUT NOV2 14525 60 +0.41 -1.82
LME Nickel 15635.00 35.00 +0.22 -16.44
LME Lead 1872.00 12.00 +0.65 -8.01
SHFE PB FUT 14795 -10 -0.07 -3.24
LME Tin 18350.00 0.00 +0.00 -4.43
LME/Shanghai arb 1170
Shanghai and COMEX contracts show most active months
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 6.3864 Chinese yuan)