* Hopes pinned on European leaders meeting
* U.S. earnings, retail sales data lift equities
* China Sept CPI +1.9 pct yr/yr, in line with forecast
* LME zinc inventories at multi-year high (Changes dateline, byline, adds quotes, updates prices)
By Veronica Brown
LONDON, Oct 16 (Reuters) - Copper prices were lifted from one month lows on Tuesday, taking a lead from a firmer tone in share markets and the euro after a stronger than expected batch of U.S. data and earnings.
Investors were also buoyed by hopes that a meeting of European leaders later in the week might advance plans to tackle Spain and Greece’s debts.
Three-month copper on the London Metal Exchange was 0.7 percent higher at $8,149 per tonne, having fallen to its lowest level since mid September in the previous session.
Volumes were reduced as market participants attended events organised for London Metal Exchange dinner week.
“Market positioning is relatively light and, whilst the recent economic data out of the U.S. has been good, it is firmer evidence of a turn in China that will drive base metals further from here,” Marex Spectron macro strategist Guy Wolf said.
China’s consumer price inflation eased to 1.9 percent in September from August’s 2.0 percent, while producer prices dropped 3.6 percent from a year earlier. Both numbers matched the forecast of economists polled by Reuters.
Analysts say it is hard to predict whether China will be easing policy soon after benign inflation in September showed it has the scope to do so, although evidence is mounting that earlier pro-growth measures are gaining traction, reducing the pressure on policymakers to act as a once-a-decade leadership transition approaches.
Asia-based traders and analysts said consumer demand for copper in China remained weak despite a drop in the discount of spot copper over the ShFE front-month November contract to 100 yuan from as much as 150 yuan on Monday.
A Shanghai-based trader attributed the change mainly to a steeper fall in front-month futures’ value in recent days, rather than a surge in spot copper demand.
In another sign of sluggish spot demand, the ShFE front-to-third month spread switched to a contango on Monday, after being in backwardation since late July.
Looking forward, analysts moderated downbeat views of copper prices in the final quarter of this year and in 2013 after central bank stimulus, but most expect uncertainty over China to prevent a quick return to bullishness, a Reuters poll showed.
Zinc snapped six sessions of losses, last quoted up 0.1 percent at $1,917.75.
“It’s a technical rebound after LME zinc fell through its 60-day Moving Average yesterday,” said Minmetals Futures analyst Chen Yuan.
But analysts said zinc prices were still under pressure from high LME inventories, which are at their highest in at least four years. MZNSTX-TOTAL
Goldman Sachs said in a note on Monday that the global zinc market would see a surplus of 393,000 tonnes in 2012 and 181,000 tonnes in 2013.
Aluminium was broadly flat at $1,961.75, while tin was up 0.7 percent at $21,250.
Jiangxi Copper Company Ltd , the top copper producer in China, plans to cut domestic sales and increase exports of the metal next year to take advantage of strong copper prices on the London Metal Exchange, a senior executive said.
Additonal reporting by Carrie Ho in Shanghai,; Editing by William Hardy