METALS-Copper extends rise after Fed rate cut; profit-booking caps gains

(Adds background and trader comments in paragraphs 8-9, updates prices as of Asian market close)

BEIJING, Dec 11 (Reuters) - Copper prices traded higher for a second straight session on Thursday after the U.S. Federal Reserve cut interest rates, though some of the early gains were trimmed by profit-booking triggered by caution over demand outlook.

The most-traded copper contract on the Shanghai Futures Exchange closed daytime trade 0.57% higher at 92,180 yuan ($13,059.25) per metric ton. It touched an intraday high of 93,000 yuan, near the record 93,300 yuan hit on December 8.

The benchmark three-month copper on the London Metal Exchange rose 0.36% to $11,598.5 per ton by 0803 GMT after hitting an intraday high of $11,727.5, approaching its all-time high of $11,771 reached on Monday.

The Fed trimmed policy rate by 25 basis points on Wednesday, widely in line with expectations.

The central bank said it would start buying short-dated government bonds from Friday to help manage market liquidity levels to ensure it retains firm control over its interest rate target system.

"It's not just the rate cut, but the Fed's stance of balance sheet expansion that bolstered copper prices," said Xiao Jing, a Beijing-based analyst at broker SDIC Futures.

Lower copper output from Chilean state-run miner Codelco also underpinned prices.

However, price gains narrowed as concerns over demand prospects resurfaced after AI cloud firm Oracle missed quarterly revenue estimates, a sign that corporate spending on its cloud services may be cooling amid broader concerns of a bubble in the artificial intelligence market.

"It challenged the AI narrative... if AI prospects collapse, the upstream raw materials will also take a hit," a Beijing-based trader said on condition of anonymity.

Similarly, aluminium gained as global producers sought premiums of $190-$203 per ton from Japanese buyers for January-March primary metal shipments, up 121%-136% from the current quarter.

SHFE and LME benchmarks climbed 0.21% and 0.03%, respectively.

SHFE lead gained 0.7%, tin jumped 0.73% while nickel shed 0.92% and zinc eased 0.24%.

Other LME metals mostly advanced. Lead rose 0.43%, tin climbed 1.03% and zinc firmed 0.18% while nickel dipped 0.29%. ($1 = 7.0586 Chinese yuan) (Reporting by Amy Lv and Lewis Jackson; Editing by Sumana Nandy, Subhranshu Sahu and Rashmi Aich)