By Glenys Sim Oct. 17 (Bloomberg) -- Copper led an advance in base metals, heading for its first weekly increase in five weeks, as U.S. equities rallied on prospects of a government rescue of bond insurers. Copper and aluminum are the only metals on the London Metal Exchange poised for a weekly increase. Zinc, lead, nickel and tin are down this week on growing concern a global recession will damp demand for raw materials. The London Metal Exchange index of six metals fell 4.4 percent yesterday. ``With every announcement, some nerves are soothed, although it doesn't take much to rattle them again as the underlying problem of recession still looms,'' Wang Pengzhen, an analyst at Zhongda Futures Co., said today from Zhejiang. Three-month delivery copper jumped as much as 6.7 percent to $4,960 a metric ton, and traded at $4,850 at 9:59 a.m. Singapore time, rebounding from yesterday's 5.5 percent decline. Copper is up 1.2 percent this week. Copper for January delivery on the Shanghai Futures Exchange dropped as much as 4.6 percent from the previous settlement price to 37,790 yuan ($5,532) a ton, and traded at 38,500 yuan at 10:01 a.m. local time. Bond insurers in the U.S are working on a plan to send to the Treasury that would enable them to sell troubled assets to the government, according to Ambac Financial Group Inc, the second-largest bond guarantor yesterday. ``Sentiment in the market is still very poor,'' said Wang. ``We'll probably see quite a bit of volatility today as investors close out their positions because few want to hold on to anything over the weekend.'' Aluminum Gains Three-month delivery aluminum on the LME is up 0.9 percent for the week, climbing as high as 2.8 percent to $2,247 a ton today. The metal for January delivery in Shanghai gained the exchange-imposed daily limit to 13,980 yuan a ton. China still has a ``significant surplus'' of the lightweight metal due to slowing demand, Standard Chartered Plc analyst Judy Zhu wrote in a report late yesterday. Production is still high despite production cuts, she said. ``As consumption by the majority of consumers is unlikely to rebound significantly in the fourth quarter, we have substantially revised down our forecast for China's primary aluminum consumption growth in 2008 to 14 percent year on year, from 23 percent previously,'' Zhu wrote. Among other LME-traded metals, zinc rose as much as 8.9 percent to $1,285 a ton, lead gained as much as 5.5 percent to $1,435, nickel climbed as high as 7.1 percent to $11,550, and tin added as much as 2.6 percent to $13,800. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

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