* NY trading stabilizes after Tuesday's 'fat finger'
* March Shanghai copper extends gains, hits 4-mth high
* Prospect of purchases by state reserves boosts prices
SINGAPORE/NEW YORK, Dec 26 Shanghai copper
futures rose to four-month highs and U.S. prices extended recent
gains on Thursday on growing confidence about the global
economy, year-end covering and the prospect of purchases from
China's state reserves.
Strong U.S. economic data on Thursday and a bullish growth
forecast for China, the world's No. 1 consumer, fuelled hopes
about stronger demand for copper and other industrial metals.
The number of Americans filing new claims for unemployment
benefits fell last week to the lowest level in nearly a month, a
hopeful sign for the labor market. Initial claims for state
unemployment benefits decreased 42,000 to a seasonally adjusted
338,000, the Labor Department said.
Citing an improving labor market, the Federal Reserve last
week said it would reduce its monthly $85 billion bond buying
program by $10 billion starting in January.
"The jury's still out, but the Fed decision to taper last
week was a vote of confidence, not just for the U.S. economy but
for the global economy," Adam Sarhan, president at Sarhan
Capital, a New York-based financial advisory.
In New York, the most-active COMEX March copper contract
settled at $3.3985 per lb, up 0.7 percent and close to
Tuesday's peak, which was the highest since April.
On Tuesday, a big, errant 'fat finger' buy order sent prices
soaring over 2 percent in a matter of minutes to their highest
in more than seven months.
"The fact that it's still holding suggests it was the
beginning of sustained new buying," said Sarhan.
The London Metal Exchange is shut on Thursday for the Boxing
The markets rebuffed a stronger dollar. A healthier
dollar makes it more expensive to buy dollar-denominated
commodities. U.S. equities were also higher.
Up for a fifth straight session, the most-active March
copper contract on the Shanghai Futures Exchange ended
0.38 percent higher at 52,210 yuan ($8,601) a tonne hitting
52,770 yuan - its highest since late August.
China's growth is likely to come in at 7.6 percent this
year, just above the government's target of 7.5 percent,
according to a cabinet report cited by the official Xinhua news
The State Reserves Bureau (SRB) is working on plans to buy
about 300,000 tonnes of copper and 100,000 to 150,000 tonnes of
nickel in 2014 to take advantage of weak international prices.
"Market sentiment is still positive ... brought about by
news of SRB's intention to purchase copper. So any good news
could bring prices into an upward trend," Chunlan Li of
consultancy CRU in Beijing said in an email.
The potential purchases by the SRB would be equivalent to
two-thirds of the copper stocks and could boost prices of the
metal, which have fallen 8 percent on the LME and Shanghai this
year on declining demand from top consumer China.
Investors remain concerned about the potential impact on
demand from the country's cash crunch even as constricted
supplies have eased.
Three month LME copper
Most active ShFE copper
Three month LME aluminum
Most active ShFE aluminum
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin