Chinese investors are shifting their money into the surging futures markets, including metals contracts
Most Shanghai copper futures (0#SCF:) rose their three-percent limit on Thursday while the LME jumped to six-year highs, as investors were bullish over the near-term trends of metals markets, traders said. Strength in metal contracts on the Shanghai Futures Exchange prompted Chinese punters to pull their money out of persistently weak domestic stock and debt markets, pushing most Shanghai copper contracts to record highs, they said.

Shanghai's most active April contract (SCFJ4) jumped a three percent daily limit of 530 yuan to 21,290 yuan ($2,572). It has surged 28 percent since the start of September.

In comparison, China's benchmark stock index (Shanghai:^SSEC) has dropped five percent in the period and is down 40 percent since its peak in mid-June 2001.

"Chinese investors are shifting their money into the surging futures markets, including metals contracts," said a Shanghai trader. "There are widespread expectations that copper prices will continue to rise at home and abroad in the near term."

LME three-month copper (MCU3) jumped to its highest since October 1997 in early Asian trade on Thursday, driven, in turn, by the metal's jump to limit-highs on the Shanghai exchange, traders said.
- posted by Igor @ 11:56 AM