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Copper surrenders gains as AI selloff offsets macro optimism

By Reuters News

By Solomon Cefai

SINGAPORE, Nov 5 (Reuters) - Copper gave up earlier gains on Thursday as market sentiment around AI took a turn for the worse, offsetting otherwise effusive macroeconomic sentiment.

Benchmark three-month copper on the London Metal Exchange was down 0.04% at $14,005.5 a metric ton by 0700 GMT.

The most-traded copper contract on the Shanghai Futures Exchange edged 0.38% higher to 107,900 yuan ($16,178.61) a ton.

Fears that the Democrats' sweeping US midterm victory could restrain the AI buildout weighed on copper that has benefited from hopes of demand growth tied to investment in AI infrastructure.

South Korea's technology-heavy KOSPI index .KS11 was down more than 5% and near a seven-month low, while Taiwan's benchmark index .TWII and Japan's Nikkei .N225 also fell.

That offset wider market optimism that supported other industrial metals.

Investors are hoping that a divided Washington will temper the worst of the policy unpredictability that buffeted global markets under the Trump administration.

Oil prices fell sharply overnight, with investors betting the shift of power would hasten the end of the US-Israeli war with Iran that has dampened the global growth outlook.

Copper remained tight outside the US.

In its biggest consumer, China, the Yangshan premium , a gauge for its appetite for imported copper, returned to $205 a ton on Wednesday, its highest in over a decade.

Solar and clean energy stocks rose, as investors expected a Democratic sweep would help keep federal support for clean energy development in place.

Nickel, which is used in batteries and steel, was a particular winner, with reports of regulatory action against a prominent player in major producer Indonesia also offering support.

On the LME it gained 2.95%, and on the SHFE it rose 5.27%, for its biggest daily increase since January.

Among LME metals, aluminium gained 1.03%, zinc gained 0.88%, lead gained 0.96%, and tin rose 1.82%.

Among SHFE metals, aluminium gained 0.71%, zinc gained 1.42%, lead gained 1.28% and tin rose 1.68%.

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