By Glenys Sim Oct. 29 (Bloomberg) -- Copper climbed for a third day as a rally in global stocks stemmed a sell-off in commodities and as the dollar declined on expectations of a U.S. rate cut. The metal in Shanghai rose for the first time after dropping the daily limit for the past five trading sessions. The MSCI Asia Pacific Index added as much as 5 percent, building on a global rally amid speculation Japan will cut rates and China will take steps to boost its markets, joining governments around the world in efforts to revive confidence. Base metals benefit from the ``positive correlation'' with equities, Tobias Merath, head of commodity research at Credit Suisse Group, wrote in a note today. ``We think that price risks continue to be skewed to the downside over the next weeks.'' Copper for delivery in three months rose as much as 3.2 percent to $4,260 a metric ton, and traded at $4,219.50 at 2:33 p.m. in Singapore, extending yesterday's 2.7 percent gain. Copper for January delivery on the Shanghai Futures Exchange added as much as 3.5 percent to 32,900 yuan ($4,816) a ton, and closed at 31,820 yuan. The most-active contract tumbled the exchange-imposed daily limit for the past five trading sessions. The ICE futures exchange's U.S. Dollar Index, which tracks the greenback against six major currencies, fell for the first day in four on speculation the U.S. policy makers will cut borrowing costs later today to spur growth in the world's biggest economy. The Fed's Open Market Committee will probably reduce the benchmark federal funds rate by half a percentage point to 1 percent, the lowest since May 2004, according to a Bloomberg survey of 64 economists. ``In light of the expectation of a Fed rate cut today, short covering is likely to continue, however market sentiment is still quite fragile and most prices are still in a solid downtrend,'' said Merath. Among other LME-traded metals, aluminum rose 0.7 percent to $2,125 a ton, tin added 0.8 percent to $14,850, while zinc was little changed at $1,155. Lead fell 1.2 percent to $1,452, and nickel lost 1.4 percent to $11,800 as of 2:35 p.m. in Singapore. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

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