May 4 (Reuters) - London copper rose on Wednesday as investors took advantage of a steep fall in the previous session to buy the metal, although demand outlook still appeared weak with COVID-19 lockdowns in key consumer China and aggressive interest rate hikes globally.
Benchmark three-month copper on the London Metal Exchange (LME) was up 1% at $9,501.50 a tonne, as of 0739 GMT, recovering from a more than 3% fall on Tuesday.
"A strong dollar ahead of the Fed outcome and China's struggle with COVID-19 have been major headwinds. Outlook is slightly bearish in copper," said Jigar Trivedi, a commodities analyst at Mumbai-based broker Anand Rathi Shares.
"We are seeing some bargain hunting, but activity is very thin with China and Japan markets closed for holidays."
Beijing shut dozens of metro stations and bus routes on Wednesday in its campaign to stop the spread of COVID-19 and avoid the fate of Shanghai where millions of residents have been under strict lockdown for more than a month.
Market participants are awaiting the outcome of the Federal Reserve policy meeting due later in day, which could impact economic growth and liquidity in financial markets.
The U.S. central bank is expected to raise rates by 50 basis points, and markets are pricing in an aggressive run of hikes as it tries to tame rapid inflation.
DOLLAR: The dollar index edged towards 20-year peak hit last week. A stronger dollar makes greenback-denominated metals more expensive for buyers using other currencies.
ICSG: The global copper market is expected to see a surplus of 142,000 tonnes this year and of 352,000 tonnes in 2023, the International Copper Study Group said.
CHINA: Fitch said on Tuesday it had cut China's GDP growth forecast for 2022 to 4.3% from 4.8%.
PERU: Hundreds of workers from a massive copper mine took to the streets of Peru's capital on Tuesday, waving flags and chanting slogans that demand the government find a solution to a grinding conflict that has temporarily shuttered the project.
PRICES: LME aluminium gained 1% to $2,941 a tonne, zinc shed 1.2% to $3,911.50, nickel eased 0.2% to $30,910, lead climbed 1.3% to $2,280 and tin rose 0.3% to $40,395.
(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)