London copper slipped 0.9 percent on Tuesday, giving up almost half its gains in the previous session, as relief over EU's bailout of Spain's banks turned into worries about how the funds will affect its borrowing costs.    

 

Uncertainty over Greek elections on Sunday is also keeping investors cautious as European officials discuss contingency plans should Greece exit the euro zone.    

Three-month copper on the London Metal Exchange fell 0.9 percent to $7,352 a tonne by 0111 GMT after rising 1.7 percent on Monday, although it remains on track to post a 0.8 percent gain this week.The most-active September copper contract on the Shanghai Futures Exchange fell 1.2 percent to 53,700 yuan($8,400) a tonne, after rising 2.5 percent the previous session.  

 

The euphoria over an EU bailout for Spain's troubled banks has faded as investors sounded the alarm over its impact on public debt and worried whether Greek elections will deepen the euro zone crisis. European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario should Athens decide to leave the euro.

 

There are signs that the economies of two of the world's leading emerging powerhouses, India and China, are starting to falter, while Europe continues to be handicapped by its debt woes, the latest report from the OECD showed on Monday. Two U.S. Federal Reserve policymakers amplified their concerns over Europe's crisis on Monday, offering praise for the weekend deal to bail out Spanish banks but warning that much is yet to be done to avoid global spillovers.

 

Asian markets reversed the previous day's hefty gains as a European bailout for Spain's debt-stricken banks failed to convince investors that the spread of the debt crisis in Europe will be halted. The euro was on the defensive on Tuesday as worries over Spain's hurried bank bailouts were compounded by jitters about upcoming elections that may determine Greece's future in the euro.