(Bloomberg) -- Copper gave up some of the gains driven by China’s recent stimulus package and better than expected US jobs data added to the slump.
The industrial metal has risen in recent weeks as Chinese authorities stepped up efforts to revive economic growth, and it now looks to be consolidating those gains. In earlier trading Thursday, it rose to near a multimonth high.
A gauge of Hong Kong-listed Chinese stocks dropped almost 5%, following a 13-day rally, a sign that investor enthusiasm over the stimulus policies may be ebbing. Mainland markets are shut through Monday due to a weeklong national holiday, likely damping trading volumes in metals during the Asian day.
Investors are looking for any signs that the latest batch of policies — which included easing restrictions on home-buying in major cities — will help lift the property sector out of a protracted slump. The country’s real estate industry is a globally significant source of demand for metals.
Data on Thursday that showed applications for US unemployment benefits rose slightly to a level that is consistent with limited number of layoffs, could also have contributed to the losses in metals, according to Phil Streible, chief market strategist at Blue Lines Futures LLC. The positive outlook may have dampened optimism that the Federal Reserve will cut interest rates another half point at the next meeting.
“All the foreign currencies are heading lower and it’s basically dragging down everything you’ve got. Everything from aluminum, platinum, palladium, all lower. So that’s part of a drag on that market,” Streible said.
Copper futures declined 1.9% to $9,902 a ton on the London Metal Exchange as of 5:49 p.m. local time. Most metals were lower, with aluminum down 1.8% and nickel down 3.1%.
--With assistance from Mark Burton.
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