METALS-Copper near 10-month top on equities/commods rally

* Copper ends up about 4 pct after near 10-month highs

* Aluminium, zinc prices spike too, joining copper rally

* Run-up fueled by weaker dollar, equity/commods rally

* Further support from US jobs/euro zone data, China
policy

(Recasts, updates prices, market activity to close of U.S.
session; adds new byline, adds NEW YORK to dateline)

By Barani Krishnan and Rebekah Curtis

NEW YORK/LONDON, July 30 (Reuters) - Copper prices rose
about 4 percent on Thursday, near 10-month highs, as the dollar
weakened and equity and commodity markets rallied on renewed
economic optimism.

Better employment data out of the United States, a surge in
euro zone economic sentiment and China's pledge to retain a
growth-friendly monetary policy combined to push global stock
markets higher, and the euphoria flowed into commodities too.

"It all has to do with what's happening on the outside
markets," said Frank McGhee, a metals trader at Chicago's
Integrated Brokerage Services LLC.

"Any type of increase or restabilization in economic
activity will bring the copper stocks down quickly and any type
of slowdown again is going to cause them to rebuild."

Copper for September delivery HGU9 closed up 8.65 cents,
or 3.5 percent, at $2.5640 a lb on the New York Mercantile
Exchange's COMEX division. The session high was $2.5750 --
almost near the 10-month peak achieved on July 27.

Copper for three-month delivery MCU3 on the London
Metal Exchange hit a session high of $5,640 a tonne and closed
at $5,601, up $186. It hit a 10-month high of $5,646 earlier in
the week,

China soothed global markets by reaffirming its intention
to retain a monetary policy that keeps its economy expanding.

This comforted investors a day after markets were rattled
by fears Beijing would clamp down on credit availability.
[ID:nSP533074]

Investors are counting on fast-growing China to lead the
way out of the global economic downturn. Analysts are broadly
confident that demand from China will keep supporting copper
prices as investors await a recovery in OECD demand.

Buying by China, the world's top copper consumer, has
helped fuel a near 80 percent rally in the metal this year.

Still, some investors remained cautious about Beijing's
future moves.

"If there is going to be tightening in lending in China,
and that has knock-on effects across the rest of the Chinese
economy, then there will be adverse effects as far as all
commodities are concerned," said Charles Kernot, an analyst at
Evolution Securities, adding gains in copper looked fragile.

Reminding investors that there is still demand for copper,
cancelled warrants on the metal in LME warehouses -- which
indicates material due for delivery -- rose to 13,675 tonnes
from 11,900 tonnes.

NICKEL, ALUMINIUM JUMP TOO

LME nickel MNI3 closed up $950 at $17,200 a tonne,
matching 10-month highs achieved earlier this week.

LME aluminium MAL3 rose $76 to $1,879 a tonne after
hitting $1,890, its highest since Nov. 19, 2008.

Stocks of aluminium, used in transport and packaging, fell
3,725 tonnes on the day. But inventories remained near record
high levels of almost 4.6 million tonnes, more than double the
2.6 million tonnes seen at the end of 2008.

"LME price premiums increased to the highest level in 2.5
years and the spot price has moved through the important $0.80
per lb level," investment banker and broker Morgan Stanley said
in a note about aluminium.

It said a significant amount of aluminium in exchange
warehouses was reported to be tied up in financing deals that
could be unwound if price premiums rose much further.

"This could result in a fairly quick increase in physical
availability and price weakness," the note added.

LME zinc MZN3 traded at $1,711 from Wednesday's 1,643.
Zinc stocks rose 15,350 tonnes to 393,425 tonnes. The inventory
growth took place entirely in the U.S. state of New Orleans,
keeping with a recent trend.

Battery material lead MPB3 rose to $1,820 on the LME,
from Wednesday's 1,760. It hit $1,826, its highest since June
12.

LME tin MSN3 was last quoted at $14,475/14,500 from
Wednesday's last quote of $14,200.

For a story on the LME and non-commercial positions, click
on [ID:nLT707822]

For an analysis on aluminium, click on [ID:nLL175677]

Metal Prices at 1617 GMT
Metal Last Change Pct Move End-08 Ytd Pct move
COMEX Cu 255.15 8.05 +3.26 139.50 82.90
LME Alum 1875.00 72.00 +3.99 1535.00 22.15
LME Cu 5600.00 185.00 +3.42 3060.00 83.01
LME Lead 1811.00 51.00 +2.90 999.00 81.28
LME Nickel 17060.00 810.00 +4.98 11700.00 45.81
LME Tin 14415.00 315.00 +2.23 10700.00 34.72
LME Zinc 1704.00 61.00 +3.71 1208.00 41.06
SHFE Alu 14575.00 365.00 +2.57 11540.00 26.30
SHFE Cu* 43200.00 220.00 +0.51 23840.00 81.21
SHFE Zin 13960.00 170.00 +1.23 10120.00 37.94
** 1st contract month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN SHFE ZN began
trading on 26/3/07
(Additional reporting by Pratima Desai; Editing by Marguerita
Choy)