Copper futures rose 1 percent yesterday, with prices in London and Shanghai reversing early losses in a choppy trading pattern that is set to continue as investors weigh increasingly positive data against fears the rally is overdone.

Metals prices have surged this year - copper and lead have rallied almost 110 percent since January - and even aluminum, the weakest of the LME constellation, has risen 24 percent.

But a slide of 3 percent in oil on Tuesday, crude's biggest one-day loss since Aug 14, a near-4,000 ton copper stock rise and worries that Chinese demand for industrial raw material is slowing from its record pace in the year to July, sparked profit-taking across the frothy sector.

"The London guys got a little nervous that the market was overcooked. The RSI in copper has been pretty high and the slower tempo in imports probably spooked a few of the longs to cash out," a dealer in Singapore said.

"But sentiment here is a bit more positive. The recovery continues. US data is moving from 'less worse' to 'more better'."

US data on Tuesday included better-than-expected consumer confidence numbers and a second monthly rise in home prices.

The dealer doubted the market had much room on the upside - investors have priced in a lot of positive news - but he expected a period of consolidation that would cement current ranges, with copper trading in a broad band between $5,700 and $6,700 over the next four to six weeks.

Shanghai copper SCFc3 rose 1.3 percent, or 620 yuan ($90.76), to 50,020 yuan, having dropped to 49,000 yuan in early trade. The discount for Shanghai copper has halved in the past two days to 823 yuan, accounting for China's 17 percent VAT and if the trend continues merchants might again gear up to import spot material.

Sentiment in Shanghai was underpinned by the reversal of a 1.5 percent early loss in Chinese equity markets, which rallied 1.8 percent, lifted by a recovery in property shares.

"It's a volatile market at the best of times. There has been talk of monetary tightening in China, informally at least," a trader in Hong Kong said. "People are desperate for direction, and may think the Shanghai composite is where that direction may show up first."