London: Copper and crude oil edged higher yesterday as risk appetite improved after Greece dropped plans to hold a referendum on a European Union bailout.
Investors remained jittery, however, and volumes were generally light as Greek Prime Minister George Papandreou faced a cliff-hanger vote of confidence later in the day after having backtracked on his shock-call for a referendum.
"The market is purely sentiment-driven at the moment; risk sentiment keeps swinging back and forward but volumes are pretty low," said analyst Andrey Kryuchenkov of VTB Capital. "People are hoping... Greece will do whatever the EU proposes and that the debt crisis won't spread."
Three-month copper on the London Metal Exchange climbed 0.4 per cent to $7,942.50 (Dh29,173.21) a tonne at 12.50pm. The metal earlier hit a session high of $8,059.75 per tonne.
The decision of the Eur-opean Central Bank to cut interest rates in a surprise move on Thursday also supported market sentiment although worries about a slowing economy escalate.
"The surprise rate cut by the ECB on Thursday is a two-edged sword for industrial metals," Credit Suisse said. "On the one hand, lower rates mean lower financing costs for industrial metals. On the other hand, it also signals that the economic slowdown is probably not over yet."
Brent crude oil climbed $0.70 or 0.6 per cent to $111.53 a barrel while US light crude rose 0.23 cent or 0.2 per cent to $94.30.
"There is positive sentiment around despite the lack of clarity regarding the Greek political situation and with the G20 going on, I would be wary to call a burst higher in the oil contract," said GFT derivatives market strategist David Morrison.
