India's copper futures rose by over 4 percent on Tuesday on global leads, further supported by a weaker rupee, analysts said. But gains were capped by weak demand outlook amid a global financial turmoil, a deepening recession and rising inventories, analysts said. "Investors are building positions on the hope that copper may get higher weightage in the re-balacing of major commodity indices for the new year," said Devarsh Vakil, manager, research, at Anagram Capital in Ahmedabad. London copper prices jumped more than 6 percent on Tuesday to a nearly five-week high ahead of an annual re-rating by major commodity indices. The Dow Jones AIG .DJAIG annually recalculates the weightings for the individual commodities in its index and is set to raise the weighting for copper traded on NYMEX. See [ID:nL6461976] Meanwhile, the world's No. 1 copper producer, Codelco, has cut annual copper premiums for some buyers by a further 4 percent, to $72 a tonne, after initially setting the 2009 premium at $75, itself a 32 percent reduction from 2008. [nSP420470] At 3:39 p.m., the benchmark copper February contract MCCG9 traded 4.40 percent higher at 166 rupees per kg. The contract gained 10.1 percent for the last five sessions. "Copper rally may continue for another two sessions and may target 174 (rupees)," said Amrut Deshmukh, a technical analyst at Way 2 Wealth Securities in Mumbai. Buying is recommended in copper on close above 165 for a target of 172 with a stop loss below 162, said Navneet Damani, an analyst at Anand Rathi Commodities. At 3:39 p.m., January zinc MZIF9 was 1.76 percent higher at 63.55 rupees per kg, while January lead MLDF9 was higher by 3.47 percent at 56.60 rupees per kg. (Reporting by Siddesh Mayenkar; Editing by Sunil Nair)

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