SINGAPORE: London copper rose on Thursday, rebounding from near one-week lows hit in the previous session as investors looked to Europe for more easing measures after the US Federal Reserve dashed hopes by deferring fresh monetary stimulus.

The Fed stopped short of offering new monetary stimulus on Wednesday even as it signalled more strongly that further bond buying could be in store to help a US economic recovery that it said had lost momentum this year.

Investors are now focusing on the policy meeting of the European Central Bank (ECB) later in the day, with expectations for bold actions after the bank's president Mario Draghi pledged to do everything within the bank's mandate to hold the euro zone together.

“I don't see the market going anywhere for the moment. The market is still waiting for the ECB today and US jobs data tomorrow. But the situation here is still very bearish,” Shanghai-based commodities analyst Judy Zhu of Standard Chartered said.

Three-month copper on the London Metal Exchange rose 0.50 per cent to $7,462 a tonne by 0700 GMT, reversing some losses from the previous session when prices hit $7,421.50 a tonne -- the lowest since July 26. Prices have shed almost 15 per cent from highs seen in February this year.

Traders said gains in metals stemmed from short-covering with only bits and pieces of bargain hunting by consumers.

“Last night was a fizz in the end,” said one Singapore-based trader.

“We have seen small amounts of consumer buying on copper but nothing special, and some Chinese taking back shorts. I think this is very neutral ground ahead of the ECB.” The most-traded November copper contract on the Shanghai Futures Exchange closed down 0.24 per cent at 54,650 yuan ($8,600) a tonne.

STIMULUS EYED

More stimulus could prop up metals prices by easing credit access for industry and by boosting the value of hard assets against paper currency. But growing gloom over global growth prospects after a string of worsening manufacturing reports from China, the euro zone and the United States paint a darkening outlook for metals demand, analysts said.

US and euro zone manufacturing struggled again in July while factory activity in China hit an eight-month low, survey showed on Wednesday, as economies worldwide appeared to lose momentum.

“Consumers say they are not seeing any improvement in the downstream demand even after the Chinese central bank cut interest rates twice, even after Beijing said they're going to show more support to new projects. Based on all the information on the ground from China ... investors should be more cautious about global growth,” Zhu said.

China is the top consumer of most commodities, including copper and accounted for 40 per cent of refined copper demand last year.

A downturn in forward indicators of coal, iron ore and steel prices is ominous, say shipping firms and bulk commodities traders.

“Hope for a boost in 2H12 consumption, as a result of Chinese infrastructure and other central bank stimulus measures spending, continues to be overshadowed by euro-fears which has kept a lid on commodity prices generally,” RBC Capital said in note.