* Industrial metals tumble on fears rally was overstretched
* Oil slides, equities stall as risk appetite wanes
* GRAPHIC-2016 metal returns: tmsnrt.rs/2eqHKkL (Updates with closing prices)
By Jan Harvey
LONDON, Nov 29 (Reuters) - Lead and zinc fell more than 6 percent on Tuesday from the previous day’s multi-year peaks, as sliding oil prices and perceptions that a post-U.S. election rally had become overstretched prompted selling.
Industrial metals surged earlier this month on speculation that U.S. president-elect Donald Trump’s pledge to lift infrastructure spending could boost demand, but the sharpness of their run higher has left markets vulnerable to correction.
Lead and zinc in particular rallied on Monday, but struggled to maintain gains in the face a more than 4 drop in oil prices, which tempered appetite for assets seen as higher risk, such as industrial metals.
London Metal Exchange lead closed down 6.7 percent at $2,354 a tonne, its biggest one-day drop in more than five years, while zinc ended the day down 6.6 percent at $2,710, its biggest daily fall since Nov. 2010.
“Today we’re seeing some risk-off mood -- just look at oil prices,” Commerzbank analyst Daniel Briesemann said. “(So) we’re seeing some profit taking after the sharp price rises.”
“Yesterday zinc marked a nine-year high, and lead rose to its highest level in more than five years,” he said. “The move was too fast and too furious, and there is still correction potential.”
Lead is still up 14 percent this month, its biggest monthly rise since April last year. With few signs of a change in its usage profile and little evidence of tightening supply, its rise has raised concerns that it has been caught up in a speculative wave sweeping across commodities.
The International Lead and Zinc Study Group (ILZSG) recently forecast a modest 2.8 percent rise in global demand for refined lead this year.
Copper closed down 3 percent at $5,705 a tonne, having touched its highest since June 2015 at $6,045.50 on Monday.
“We get the impression that the price move as of late, especially in copper, was a bit exaggerated,” Julius Baer’s head of commodities research Norbert Ruecker said.
“We have a cautious view, especially because of the expectations that were built into prices on president-elect Trump’s infrastructure stimulus.”
Even a big increase in U.S. infrastructure spending would do little to lift overall demand, Ruecker said, while supply remains plentiful.
“The ramp-up that we’ve seen so far this year on the production side ... was the predominant topic for the market ahead of the election,” he said. “That theme should not have disappeared.”
Nickel also fell more than 5 percent to a low of $10,995 a tonne, and ended the day down 4.7 percent at $11,085.
Aluminium closed 1.5 percent lower at $1,721, while tin closed down 2.3 percent at $20,575.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
Additional reporting by James Regan in Sydney; Editing by Jane Merriman and David Evans