RTRS:METALS-London copper firms on Fed after 4 days of falls
* Fed continues with economic stimulus
* Worst of China growth slowdown may be over
* U.S. manufacturing improves, but outlook still cloudy
* Coming up: U.S. Sept. pending home sales at 1400 GMT
(Updates prices; adds quotes, details)
By Carrie Ho
SHANGHAI, Oct 25 (Reuters) - London copper rose on Thursday,
snapping four sessions of losses, on encouraging data from the
United States and China, and after the U.S. Federal Reserve
announced its commitment to economic stimulus measures.
Three-month copper on the London Metal Exchange had
climbed 0.7 percent to $7,874 per tonne by 0710 GMT, after
dropping nearly 5 percent over the previous four sessions.
"The dollar will stay under pressure (as the Fed stimulus
continues), which is supportive of commodities prices," said
China Futures Co analyst Yang Jun.
The U.S. central bank on Wednesday made no changes to its
plan to purchase $40 billion in mortgage-backed debt per month
to push interest rates lower and spur a stronger recovery.
"At the same time, with a lack of clear signals of
improvement in major economies, prices lack the momentum to rise
too much. Without any clear drivers to push base metals up or
down, trading will stay directionless and rangebound for a
while," Yang said.
Data on Wednesday showed conditions had improved slightly
for U.S. and Chinese manufacturers, although euro zone
businesses suffered another dismal month in October, suggesting
the economy may be headed for a deeper recession than expected.
China's Purchasing Managers Index in September pointed to
the world's second-largest economy making a slow, steady
recovery from its weakest period of growth in three years with
new orders and output at their highest in months.
But analysts noted that the headline reading of 49.1 was
still below the 50-point mark that separates expansion from
contraction.
"The Chinese economy looks set to improve slightly in the
fourth quarter, which will also lift copper demand and put a
floor on base metal prices. But for demand to rise
significantly, we need to see a clear and sustained improvement
in China's manufacturing PMI numbers above 50," Yang said.
Worries that a tepid rebound in China's economy may not be
enough to drive up demand for base metals nudged the most active
January copper contract on the Shanghai Futures Exchange
down 0.5 percent to a close of 57,230 yuan ($9,200) per
tonne.
