London Metal Exchange metal futres traded in a narrow range in Asian trading on Friday morning, as market sentiment was dampened by battered stock markets in South Korea, Japan and China.
Most Asian stock markets declined on Thursday and Friday morning, amid concerns about record oil prices and the possibility of higher interest rates in Japan and China. The Shanghai market dropped by nearly 5 percent on Thursday, but recovered slightly on Friday morning.
"The market seems to be cooled by the dropping stock market. The trading volume was OK, but frankly speaking we want to pause trading and see what will happen," said an LME trader in Tokyo.
Gold hit a seven-week high on Friday and crude oil futures hit a record high above $78 a barrel, as Israel continued reprisals against Lebanon following capture of two of its soldiers by the Hizbollah guerrilla group.
LME copper for delivery in three months was at $7,972 a tonne by 0451 GMT on Friday, up slightly from its close in London at $7,920 a tonne. "The market remains within our upwardly sloping trading range but looked a touch tired yesterday," ABN Amro said in a morning research note. "Technically, we would expect immediate support to remain around the congestion zone at $7850/900 with a break of historical highs the upside target."
Nickel futures fell 1 percent from their Thursday close, but remained within striking distance of a $26,600 historic high hit mid-week. Shanghai's most-active September contract ended the morning session down 0.1 percent at 71,130 yuan ($8,890) a tonne. Spot copper prices in eastern China fell 475 yuan a tonne to between 70,100 yuan and 70,600 yuan a tonne.
"Trading interest is trailing off due to yesterday's stock market in Shanghai, and the price is too weak to rise," said Wang Zheng, analyst at Dalu Futures Brokerage Co Ltd.