Copper prices crept up Tuesday as investor confidence rallied on hopes of Greece forming a new government that will push the bailout package needed to control a looming default.

On the London Metal Exchange, three-month copper hiked 0.7 per cent to $7,881.25 a tonne, after falling 0.6 per cent in the previous session. On the Shanghai Futures Exchange, most-active January copper contract inched up 0.5 per cent, to 58,220 yuan ($9,167.06) per tonne.

However, analysts fear the gains in base metals will be hampered by Italy's spiraling borrowing costs.

"The new Greek government is providing some optimism, but going forward, the markets are expected to turn their focus to Italy, which is too big to fail, yet too big to bail," analyst Ong Yiling told Reuters.

Politicians from Greece cooperated to form a new unity cabinet. Lucas Papademos, a former top official of the European Central Bank, emerged Monday as the leading contender to become Greece's new prime minister.

Asian shares likewise rose Tuesday, but gains were limited as investors' focus turn to Italy.

Italian Prime Minister Silvio Berlusconi is currently under pressure to resign.

"Investors will look for trading cues from today's crunch vote on Italy's finances in the arliament, where some of the opposition members are preparing a motion of no-confidence against Prime Minister Berlusconi this week," Ong Yiling said.

Investors are likewise watching a special panel in the United States that is charged with reducing the federal deficit. The panel is expected to come up with a deal before a Nov. 23 deadline.