The most-traded January copper contract on the Shanghai Futures Exchange fell 2 percent to 46,580 yuan ($7,622) a tonne on Wednesday and Shanghai zinc shed 3 percent as weak China economic data compounded a selloff that started in oil and spilled over into base metals. Growth in China's services sector weakened further in October as new business cooled, a private survey showed on Wednesday, reinforcing signs of a gradual economic slowdown that could prod the government to unveil fresh stimulus measures.
"It's fair to point the finger at oil. But the overarching concern now is deflation," said analyst Tim Radford at Sydney-based advisor Rivkin. "The key concern in the market was inflation, and how gold was going to go through the ceiling but we haven't seen that at all. We've seen a deflationary environment play out, and that's being reflected in crude oil and in copper prices," said Radford.
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