LONDON - Copper prices rose sharply on Friday but not enough to offset losses earlier in the week as turmoil in the banking sector raised the threat of bank failures and slower economic growth.

Benchmark copper on the London Metal Exchange (LME) was up 2.1% at $8,695.50 a tonne by 1157 GMT but still down nearly 2% over the week.

Prices slumped by 3.7% on Wednesday alone as the collapse of two mid-sized U.S. lenders was followed by a crisis engulfing Switzerland's Credit Suisse. Copper hit a 10-week low of $8,442 a tonne on Thursday.

However, fears of banking contagion eased somewhat by Friday after the Swiss central bank gave massive emergency funding to Credit Suisse and U.S. authorities and banks took action to rescue First Republic Bank.

European stock indexes rose, extending a recovery from Thursday. Chinese shares also gained. {.SS]

The mood on wider markets will dictate copper's near-term price movement, said Saxo Bank strategist Ole Hansen, though he expects strong fundamentals to lift prices before long.

Analysts at Citi said they expect copper to fall to $8,000 a tonne in the coming months amid concern over the U.S. banking system and credit growth.

"We see this as a strong long-term buying opportunity," they said, predicting that prices will recover to $9,000 within 6-12 months.

In top consumer China, demand is rebounding and is likely to stay strong in the next quarter, buoyed by a seasonal peak in demand and easing COVID-19 restrictions.

Adding impetus to China's economic recovery, the country's central bank plans to cut the amount of cash banks must hold as reserves.

Other industrial metals also rose.

LME aluminium was up 1.2% at $2,294.50 a tonne, zinc rose 2% to $2,915, nickel gained 0.8% to $23,420, lead firmed by 0.1% to $2,068.50 and tin was up 1.2% at $22,490.

While nickel was on course for a weekly gain, the rest were all heading for small weekly declines.

(Reporting by Peter Hobson Additional reporting by Siyi Liu and Dominique Patton Editing by David Goodman)