METALS-Copper dips as U.S concerns overshadow China hopes

(Recasts, updates prices, adds details)

* China economic data eyed later this week

* Commodity index rebalancing may hit zinc, aluminium

* Europe data paints mixed picture

LONDON, Jan 8 (Reuters) - Copper dipped on Tuesday as worries over corporate earnings and fiscal problems in the United States began to outweigh supportive economic signals from China and some signs Europe's economy may be stabilising. U.S. stocks fell earlier as the earnings season was expected to show sluggish corporate growth. Added to this are worries that the U.S. Federal Reserve may rein in easing measures sooner than expected, and caution ahead of more U.S. debt ceiling negotiations in coming months. On the plus side, a Reuters poll showed China's annual economic growth may have quickened to 7.8 percent in the fourth quarter, snapping seven straight quarters of weaker expansion, while its export growth probably rebounded from three-month lows in December. China is the world's biggest copper consumer, accounting for 40 percent of refined demand. China trade data, which includes initial estimates for metals imports and exports, is due on Thursday. In Europe data was mixed, but improved from the bouts of market panic seen last year due to the sovereign debt crisis. Euro zone business confidence improved again in December, while unemployment reached a new record, suggesting a recovery from recession will be slow. German industrial orders also fell more than forecast. "The market is underpinned by expectations that a cyclical rebounding out of China will be positive for industrial metals," said Robin Bhar, analyst at Societe Generale. But he added: "There are still a few banana skins in the market. The U.S. fiscal cliff resolution was greeted euphorically but it is only temporary respite. Talks will have to start again about raising the debt limit, and that could prompt some caution." Benchmark copper on the London Metal Exchange dipped 0.22 percent to $8,053 a tonne at 1532 GMT. The metal used in power and construction, which gained more than 4 percent in 2012, hit its highest level in more than two months last week following a deal by U.S lawmakers to avoid a "fiscal cliff" of spending cuts and tax increases. "Right now, with the U.S. fiscal cliff postponed but yet to be resolved, the Italian election looming on the horizon and the Chinese likely to remain in slumber mode until after the Lunar New Year holiday, prices are unlikely to do anything too dramatic," Standard Bank said in a note.

INDEX REBALANCING Some volatility is also expected ahead of the annual rebalancing of the S&P GSCI and DJUBS commodity indexes which began this week, with selling pressure seen in aluminium and zinc, brokers said. "We would expect the nearby spreads to be offered for the next few days as the index rolls start up ... and for aluminium and zinc to underperform as the Dow Jones/UBS Commodity Index rebalance sees selling interest hitting on the close for the next few days," said RBC Capital in a note. According to Morgan Stanley research, a net decline in the Dow Jones-UBS aluminium weighting to 4.9 percent from 5.9 percent should result in sales of 14,621 lots of aluminium, just under 3 percent of total open interest in futures contracts. A decline in zinc weighting to 2.5 percent from 3.4 percent in the index should result in sales of 14,144 lots, more than 8 percent of total open interest. Benchmark zinc was down 0.64 percent to $2,008 a tonne while aluminium edged up 0.05 percent at $2,066. Lead was down 0.13 percent to $2,302, tin fell 0.21 percent to $24,000 while nickel was flat at $17,210. Metal Prices at 1535 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T

Metal Last Change Pct Move End 2012 Ytd Pct

move

COMEX Cu 366.05 -1.05 -0.29 365.25 0.22 LME Alum 2066.00 1.00 +0.05 2073.00 -0.34 LME Cu 8053.00 -18.00 -0.22 7931.00 1.54 LME Lead 2301.00 -4.00 -0.17 2330.00 -1.24 LME Nickel 17188.00 -22.00 -0.13 17060.00 0.75 LME Tin 24000.00 -50.00 -0.21 23400.00 2.56 LME Zinc 2006.50 -14.50 -0.72 2080.00 -3.53 SHFE Alu 15240.00 -25.00 -0.16 15435.00 -1.26 SHFE Cu* 58140.00 50.00 +0.09 57690.00 0.78 SHFE Zin 15320.00 -60.00 -0.39 15625.00 -1.95 ** 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 Melanie Burton in Singapore; Editing by Anthony Barker)