Wall Street yesterday awaited the next move in a brewing proxy battle for control of Kennecott Copper Corp. and puzzled over the real motivation behind Curtiss-Wright Corp.'s challenge to the management of the giant copper producer.

An apparently shell-shocked Kennecott management meanwhile was sequestered in meetings with "our inside counsel, our outside counsel, and Morgan Stanley," Kennecott's investment banker, according to a company spokesman. "The matter is under study, and we will have to wait and see what develops," he said.

Curtiss-Wright Corp., a New jersey aircraft parts and power systems manufacturer, late Monday announced it was the mysterious buyer that has been purchasing Kennecott shares in recent days.

The company, which has acquired 9.9 percent of Kennecott for $77 million, indicated in a filing with the Securities and Exchange Commission that it might solicit shareholder proxies to unseat some of Kennecott's current board members, and perhaps the company's top management as well.

Curtiss-Wright also said it might seek to liquidate some of cash-rich Kennecott's assets and return the proceeds to shareholders. And, saying it might purchase more Kennecott shares, Curtiss-Wright left open the possibility of making a bid to acquire Kennecott.

Kennecott yesterday closed at $25.125 on the New York Stockk Exchange, up $2.125 for the day, on a volume of 229,000 shares. Curtiss-Wright closed at $19, up 25 cents.

Because Curtiss-Wright has only about one-fifth the equity value of the copper giant, a takeover bid was considered out of the question by many knowledgable observers. "You've got the minnow trying to swallow the whale," commented one.

Instead, there was speculation that Curtiss-Wright was merely the stalking horse for Teledyne Corp., a multi-billion-dollar West Coast conglomerate which owns 30 percent of Curtiss-Wright shares. Under this theory, if Curtiss-Wright manages to gain enough proxies from other disgruntled Kennecott shareholders to oust Kennecott's management, Teledyne could later make an approach in what would amount to a friendly tender.

But legal experts downplayed this theory, saying that if there is such a game plan and it was not disclosed in the 13-D filing with the SEC, the action would result in a serious violation of the securities laws.

"Idon't have any comment whatsoever on the Curtiss-Wrigth situation," was the only response forthcoming from a Teledyne spokesman.

But skepticism was expressed on Wall Street that Curtiss-Wright would have made its move without the approval of Teledyne, its largest shareholder. Teledyne, however, has no members on the Curtiss-Wright board and claims it holds the shares - as it does the controlling interest in a number of other companies - only as an investment.

"Curtiss-Wright has put a big slug of their resources up to get only 10 percent of Kennecott, and they're stupid if they don't have a backer for more," said one investment banker.

In its SEC filing, Curtiss-Wright said it financed the $77 million share purchase of Kennecott through $45 million in loans from existing bank credit lines and from internal funds.

Dr. Donald Slocum, Curtiss-Wright senior vice president for corporate development, said that whether Teledyne will be asked to play any financing role if his company buys more Kennecott shares "would be a matter of speculation." Slocum would not say what the next move will be.

If Curtiss-Wright intends to indeed wage a proxy battle for control of Kennecott, it must start soon. Kennecott has scheduled its annual meeting for May 4.The rule of thumb in such matters is that a minimum of 30 days is required to contact existing shareholders for a proxy fight to have a chance of success. There was some feeling, however, that Curtiss-Wright could mount a successful battle.

"They have a chance to change the directors because there are a lot of unhappy Kennecott shareholders," said one brokerage source.

Kennecott has been the subject of takeover rumors for months ever since it received $1.2 billion for its forced divestiture of Peabody Coal Co. Several months ago, Kennecott purchased Carbordundum Corp. for $567 million - what some analysts considered an exceedingly rich price - in order to reduce some of its cash and thus its appeal as a takeover target. However, this move is known to have upset a number of investors who took large positions in Kennecott in the expectation that the company would be a tender target, and these investors could prove to be allies in a proxy fight.

Under another theory circulating yesterday, Curtiss-Wright took its 10 percent position in Kennecott purely as an investment gambit, hoping that someone else will now come in to make a tender offer for the company at a higher price, knowing that 10 percent can be quickly obtained in a single transaction.

"It seems to be a no-risk situation for Curtiss-Wright," said one observer. "They don't have anything to lose.