Shanghai Copper up; LME Hits 2-wk High

SINGAPORE, May 27 -- Shanghai copper rose nearly 2 percent on Wednesday and London futures hit their highest in two weeks, lifted by a surprise jump in U.S. consumer sentiment.

    FUNDAMENTALS

    * The benchmark third-month Shanghai copper futures contract rose 1.5 percent on Wednesday to 36,950 yuan at 0101 GMT, ahead of the two-day Dragonboat Festival holiday on Thursday and Friday.

    * The market is heading for a rise of 1 percent in May, its weakest since performance since December 2008, weighed down by sales of metal in the domestic by China's State Reserves Bureau.

    * U.S. consumer confidence soared in May to its highest level in eight months as the strain on the labour market showed some signs of easing, boosting investors hopes of a bottoming for the U.S. economy. [ID:nN26489555]

    * London Metal Exchange copper for delivery in three months rose as high as $4,710 a tonne, its highest in two weeks, having rallied 1.1 percent in the previous session. By 0101 GMT, it had fallen back to $4,675 versus $4,660 at Tuesday's close.

    * Prices have seen strong support in the first five months of the year from surging Chinese imports of a host of commodities, including copper which hit a record high of nearly 318,000 tonnes in April.

    * But BHP Billiton (BHP.AX, 34.850, +0.560, +1.630%) (BLT.AX, 0.034, +0, +0%) voiced uncertainty on Wednesday about the sustainability of that buying, saying it reflected stock-buidling as well as underlying demand and it was concerned China may have over bought. [ID:nSYB006026]

    MARKETS NEWS

    * The dollar eased against euro trading near $1.40 while crude oil came close to $63 a barrel, its highest since November.

    * U.S. stocks climbed more than 2 percent on Tuesday on the consumer confidence data, which scored its biggests gain in six years. [.N]

    DATA EVENTS

    * The following data is expected on Wednesday:

    - France May consumer confidence (0645 GMT)

    - France May business climate (0650 GMT)

    - Italy May consumer confidence (0730 GMT)

    - Italy April wage inflation (0800 GMT)

    - UK April mortgage lending (0830 GMT)

    - U.S. April existing home sales (1400 GMT)

    - U.S.' Geithner on stimulus funds (1600 GMT)

    (Source: Reuters)