WSJ: BASE METALS:NY Copper Down As China Raises Reserve Requirements
By Allen Sykora
Of DOW JONES NEWSWIRES
Copper futures are on the defensive early Tuesday in response to a hike in China's reserve requirement and disappointing earnings from Alcoa that damped risk appetite.
Around 9:41 a.m. EST (1441 GMT), most-active March copper is down 5.75 cents to $3.3835 per pound on the Comex division of the New York Mercantile Exchange.
Both a New York trader and a research note from Barclays Capital tied copper's weakness to a move by China's central bank to raise bank reserve requirements by 50 basis points.
"This will add to concerns that the Chinese government is tightening monetary policy earlier than expected and may affect metals demand," Barclays said.
If so, there is potential this could curb some demand for commodities in the world's largest consuming nation for copper.
Additionally, the metal fell in London trading overnight after markets were "unsettled" by Alcoa's weaker-than-expected earnings reported late Monday, said MF Global analyst Edward Meir. This helped dampen appetite for riskier investments.
-By Allen Sykora, Dow Jones Newswires; 541-318-8765; allen.sykora@dowjones.com
