* Copper posts biggest one-day rally since Nov. 2010
* Base metals markets eye yuan appreciation
* Coming up: U.S. July retail sales data Friday
(Rewrites, updates with closing New York price, adds graphics, analyst comments, New York dateline/byline)
By Chris Kelly and Pratima Desai
NEW YORK/LONDON, Aug 11 Copper ended up on Thursday for only the second time this month but posted its biggest daily gain in nearly nine months, as positive economic signals in the world's top-two consumers powered the rally.
Economic confidence, which has been savaged in recent days from a credit rating downgrade in the United States and concerns over a spreading debt crisis in Europe, was partly restored after an appreciation in the Chinese yuan and relatively positive U.S. labor market data struck a rare optimistic tone in the broader market.
"On a short-term basis, it appears that both copper and equities are putting in what appears to be a short-term low as long as this week's lows are not breached," said Adam Sarhan, chief executive of Sarhan Capital, a financial services firm based in New York.
But even with the positive close, recent losses have pulled copper down 1.7 percent so far this week and around 7 percent year to date, prompting some additional buying on the view that fundamentals remain strong for the metal.
"Demand from China is significant and we expect that to more than offset the falling demand in western economies," said Ana Armstrong, chairman of Distinction Asset Management.
"The sharp decline that we have seen in copper is a good buying opportunity. Whenever there is a decent sell-off investors should be ready to enter the market because global growth prospects are still quite strong."
London Metal Exchange (LME) benchmark copper CMCU3 shot up $286, or 3.3 percent, to end at $8,881 a tonne -- its largest one-day rally since Nov. 4, when the contract price surged by 3.35 percent.
In New York, the key September COMEX contract HGU1 jumped 12.00 cents or by 3 percent to settle at $4.0085 per lb, near the upper end of its $3.8560 to $4.0360 session range.
Reuters Commodities Specialist Christopher Henwood said any slowdown in global economic growth will push copper below key support levels as low as $3.40. [ID:nRTV248619]
The rally helped drive COMEX copper volumes up about 40 percent from the 30-day norm, at 66,500 lots, but well away from last Friday's record 98,079 lots.
Copper bulls fed off a strengthening yuan after top metals consumer China moved to fix its mid-point CNY=SAEC to a record high of 6.3991 versus the dollar. [ID:nEAP309B00]
"This suggests to me that Beijing is sufficiently relaxed about allowing the domestic economy to drive growth and being less dependent on the export sector," said David Thurtell, an analyst at Citi. "It shows they are confident that the Chinese economy has sufficient momentum." <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic of copper imports: link.reuters.com/suh23s
Table for July imports: [ID:nEAP307715]
Graphic on week's winners/losers:
Graphic on LME stocks, prices: r.reuters.com/hub62s
U.S. data later in the day added some support to the rally, with weekly jobless claims falling to a four-month low last week. [ID:nN1E77A099]
The data helped cement gains in the base metals and equities, alike. [.EU][.N]
"We suspect that equity markets will continue to set the tone for commodities for the balance of the week. Although the two diverged yesterday, it is very unusual for the pair to go their separate ways for long," Edward Meir, analyst at MF Global, said in a note.
(Copper/equities graphic: r.reuters.com/veq23s )
An indication of buying activity is canceled warrants, or material already tagged for delivery on stocks in LME-approved warehouses. <0#LME-STOCKS> MCUSTX-TOTAL
Total LME copper stocks were at 463,150 tonnes and canceled warrants at 8,300 tonnes. The percentage at 1.8 percent is the lowest since February 2010.
(LME warehouse graphic: link.reuters.com/neq23s )
Zinc CMZN3 rose $86 to $2,186 a tonne, recovering from key technical support near $2,000.
"$2,100 has now established itself as a good level of support for zinc and we'd expect to see further trade interest if the prices dips down towards that level again," RBC analysts said in a note.
"Fundamentally, we still don't see any major tightness in the zinc markets appearing until late next year as mine closures will begin to constrain supply." Metal Prices at 1817 GMT Metal Last Change Pct Move End 2010 Ytd Pct
move COMEX Cu 402.05 13.20 +3.39 444.70 -9.59 LME Alum 2412.00 16.00 +0.67 2470.00 -2.35 LME Cu 8881.00 286.00 +3.33 9600.00 -7.49 LME Lead 2382.00 107.00 +4.70 2550.00 -6.59 LME Nickel 21550.00 575.00 +2.74 24750.00 -12.93 LME Tin 23605.00 860.00 +3.78 26900.00 -12.25 LME Zinc 2186.00 86.00 +4.10 2454.00 -10.92 SHFE Alu 17635.00 45.00 +0.26 16840.00 4.72 SHFE Cu* 66710.00 -380.00 -0.57 71850.00 -7.15 SHFE Zin 16780.00 70.00 +0.42 19475.00 -13.84 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Harpreet Bhal in London; editing by William Hardy and Marguerita Choy)