METALS-Rising equity markets push copper higher

* A jump in U.S. stocks overnight boosts sentiment in metals

* Iinventories in both London and Shanghai falling support

* Market shrugs off hefty jump in aluminium stocks

(Recasts, updates prices and comments, pvs SINGAPORE)

LONDON, March 13 - Copper climbed around 3 percent on Friday, with sentiment boosted by higher U.S. and European stock markets, while a fall in both London and Shanghai inventories underpinned prices.

Copper for three months delivery on the London Metal Exchange rose as high as $3,690 a tonne and was at $3,675 a tonne by 1016 GMT, versus Thursday's close of $3,580 a tonne.

"The main driver is stock markets," analyst David Thurtell at Citi said. "The Dow Jones index was up very strongly and continued to rise after the FTSE closed. Metals have been taking quite a lead from equities for some months now.

"They will probably continue to do so, certainly today," he added.

U.S. stocks rose for a third day on Thursday on relief that a ratings cut by S&P in General Electric was just one notch and that no further cuts loomed, while better than expected retail sales data showed some stabilization in consumer spending.

European stocks rose, climbing for the fourth consecutive session and following the overnight gains on Wall Street.

Also supporting sentiment was a hefty fall in both Shanghai and LME inventory levels. Inventories of copper, used extensively in construction, in warehouses monitored by the Shanghai Futures Exchange fell 10 percent from one week earlier, while aluminium inventories fell 11 percent.

On the LME, stocks have fallen 6,700 tonnes to 497,625 tonnes, having dropped nearly 50,000 tonnes since late February. However, cancelled warrants -- material earmarked to leave LME warehouses -- fell to 29,825 tonnes from 37,175 tonnes.

"I think people are growing a bit sceptical about the extent to which deliveries out of LME warehouses were really being driven by anything more than simple artbitrage trade," commodity markets analyst Kevin Norrish at Barclays said.

Comments from Chinese Premier Wen Jiabao, who said 595 billion yuan had been allocated in this year's budget for stimulus moves, also helped sentiment to blossom, however, longer term demand worries remained intact..

"I still think we're probably not yet at a stage where underlying supply and demand fundamentals in copper argue for a sustained recovery," Norrish said.

EYES ON U.S. DATA

Investors will be looking at macroeconomic data to find out more about the prospects of the world economy.

"The main thing today is the University of Michigan Consumer Sentiment index for the U.S. It's a very important number and has strongly correlation between that and U.S. personal spending," Thurtell at Citi said.

"And if personal spending starts to stabilise in the U.S., the businesses will stop firing and start to restock," he said. The U.S. data is due at 1355 GMT.

LME aluminium rose $25 to $1,365 a tonne, as the market shrugged of a massive rise of almost 75,000 tonnes in inventories, bringing the total amount to 3.36 million tonnes.

Sentiment has also been lifted by a fall in China's aluminium stocks by about 500,000 tonnes from 1.1-1.2 million tonnes in early December and by an 16 percent fall in Chinese output of the metal in the first two months of the year.

"In aluminium, China matters," ANZ's senior commodities analyst Mark Pervan said. "The supply side is heavily skewed to China, where they have sunk a lot of money into the sector and are ready to come on when prices firm. Some 35 percent of world aluminium production is in China so a big drop in production there will be positive."

Zinc rose to $1,240.50 a tonne from a last quote of $1,222/1,225 a tonne on Thursday. Stocks of the metal, used to galvanise steel, fell by 2,850 tonnes.

Lead was at $1,255 from $1,237 while nickel gained to $9,650 from $9,500 while tin edged up to $10,450 a tonne versus $10,395. Metal Prices at 1014 GMT Metal Last Change Percent Move End 2008 Ytd Percent

move COMEX Cu 166.10 4.35 +2.69 139.50 19.07 LME Alum 1360.00 20.00 +1.49 1535.00 -11.40 LME Cu 3672.00 92.00 +2.57 3060.00 20.00 LME Lead 1251.00 14.00 +1.13 999.00 25.23 LME Nickel 9550.00 50.00 +0.53 11700.00 -18.38 LME Tin 10400.00 5.00 +0.05 10700.00 -2.80 LME Zinc 1235.00 -7.00 -0.56 1208.00 2.24 SHFE Alu 11900.00 145.00 +1.23 11540.00 3.12 SHFE Cu* 29150.00 170.00 +0.59 23840.00 22.27 SHFE Zin 10585.00 -55.00 -0.52 10120.00 4.59 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07