METALS-Strong manufacturing data fortifies copper

* China, U.S. manufacturing data upbeat

* Weak dollar helps boost industrial metals

* Inventories, fading equities rally caps price gains (Adds NEW YORK to dateline, recasts, updates with New York closing copper prices, adds analyst comments)

By Chris Kelly and Maytaal Angel

NEW YORK/LONDON, Nov 2 (Reuters) - Copper prices ended little changed on Monday, despite firm underlying support from a weaker dollar and strong manufacturing data in the United States and China, the world's largest consumer of industrial metals.

Copper for December delivery HGZ9 on the New York Mercantile Exchange's COMEX division ended down 1.05 cents at $2.9450 a lb, after dealing between $2.9225 and $2.9875.

On the London Metal Exchange (LME), benchmark copper MCU3 closed up $70 at $6,550 a tonne.

The metal, used in power and construction, received an early shot of adrenaline after a survey of U.S. manufacturing activity showed expansion gathering pace in October.

The Institute of Supply Management's manufacturing index rose to 55.7 in October, the highest since April 2006, from 52.6 in September. [ID:nN0251232]

"Manufacturing data showed expansion, which is positive for base metals," said David Wilson, analyst at Societe Generale. "But don't forget the data is backward looking and reflecting the impact of 'Cash for Clunkers,' which has driven up auto production."

The U.S. data followed manufacturing data from China, which showed the fastest pace of expansion in 18 months, and the euro zone, where factory activity expanded for the first time in 17 months. [ID:nSP62642] [ID:nPEK121771] [ID:nN02435553]

Also helping boost sentiment was improving home sales numbers and construction sector activity in the United States, which eroded safe-haven demand for the U.S. dollar, making dollar-priced metals cheaper for non-U.S. investors. [USD/]

"The market has been responding to the upside because of the U.S. and risk-taking trade," said Bart Melek, global commodity strategist with BMO Nesbitt Burns in Toronto. "I think we are back in the groove where these positive indicators are encouraging risk taking, weakening the dollar and precipitating the short dollar/long commodity trade."

NERVOUS MARKETS

But keeping sentiment under wraps are rising stocks of copper in London Metal Exchange warehouses, which at 372,175 tonnes are up more than 40 percent since the middle of July and the highest since May.

"The market was nervous going into this week but the Chinese PMI was a good start. The global economy is rebounding, our view is positive," said Credit Suisse analyst Tobias Merath.

"(But) inventories are rising, everybody is asking how can inventories increase with supply side outages, that's also why we had this jumpiness last week."

Analysts said markets are also waiting for a statement on the U.S. economy from the Federal Reserve on Wednesday and U.S. payrolls data on Friday.

Meanwhile, the aluminum market will be closely watching the car and truck sales data on Tuesday. Aluminum is under pressure from LME stocks of the metal used in transport and packaging, which are near a record 4.5 million tonnes.

Three-month aluminum MAL3 closed at $1,915 a tonne from $1,910, having earlier hit a two-week low of $1,885.50.

Zinc MZN3, used to galvanize steel, ended at $2,195 a tonne in rings from $2,160, recovering from falls on Friday when data showed Shanghai zinc stocks surged to 145,536 tonnes from 117,706 the week before.

Earlier zinc touched $2,132 a tonne, its lowest since Oct. 21. But the metal ended October 9.7 percent higher as investors bet on stronger demand and higher prices.

Battery material lead MPB3 closed at $2,298 from $2,305 and tin MSN3 was untraded, but bid at $14,775 from $14,700.

Stainless steel material nickel MNI3 ended at $18,060 from $18,250 on Friday. Metal Prices at 1939 GMT Metal Last Change Pct Move End 2008 Ytd Pct

move COMEX Cu 293.50 -1.25 -0.42 139.50 110.39 LME Alum 1914.00 4.00 +0.21 1535.00 24.69 LME Cu 6478.00 -2.00 -0.03 3060.00 111.70 LME Lead 2277.25 -27.75 -1.20 999.00 127.95 LME Nickel 17985.00 -265.00 -1.45 11700.00 53.72 LME Tin 14810.00 110.00 +0.75 10700.00 38.41 LME Zinc 2175.00 15.00 +0.69 1208.00 80.05 SHFE Alu 15185.00 -50.00 -0.33 11540.00 31.59 SHFE Cu* 50800.00 -400.00 -0.78 23840.00 113.09 SHFE Zin 16720.00 -110.00 -0.65 10120.00 65.22 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

For story on RUSAL/NORINCO's aluminium deal click on [ID:nL259328]

For story about attack on Peru copper project click on [ID:nN02434654] (Additional reporting by Pratima Desai in London; Editing by Sue Thomas and Christian Wiessner)