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METALS-Copper slips ahead of China PMI, nickel rally persists

SINGAPORE, April 23 (Reuters) - London copper futures edged lower on Wednesday ahead of reading on China's manufacturing activity, with a further contraction likely to cut the appetite for risky assets, although nickel hit the highest in more than 14 months on tighter supply.

HSBC's Purchasing Managers' Index for China, due out at 0145 GMT, has been below 50 since January, showing small Chinese manufacturers have been struggling this year amid slower economic growth. A further decline may sow concern among investors who were relieved last week's first-quarter gross domestic product data was slightly ahead of market expectations.

FUNDAMENTALS

* Three-month copper on the London Metal Exchange was down 0.3 percent at $6,650 a tonne by 0110 GMT.

* The most-traded July copper contract on the Shanghai Futures Exchange gained 0.3 percent to 46,630 yuan ($7,500) a tonne.

* LME nickel touched an early peak of $18,440 a tonne, the highest since mid-February last year. Tight supply courtesy of an Indonesian ban on mineral ore exports had fueled a 32 percent jump in nickel prices this year, with Indonesian exports of nickel ore to top buyer China down to less than a million tonnes in March from an average of 3.4 million tonnes a month last year.

* Hong Kong Exchanges and Clearing Ltd, which owns the LME, plans to launch copper, aluminium, zinc and coal futures contracts this year, its first foray into the fiercely competitive and burgeoning Chinese commodities derivatives market.

* U.S. home resales fell to their lowest level in more than 1-1/2 years in March, but there were signs a recent downward trend that has plagued the housing market may be drawing to an end.

* Production has been halted at Brazilian miner Vale SA's Copper Cliff North nickel mine in Canada after a major piece of equipment malfunctioned.

* Diversified Canadian miner Teck Resources Ltd plans to cut about 600 jobs, or 5 percent of its global workforce, even as its first-quarter adjusted earnings came in ahead of expectations.

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MARKETS NEWS

* Asian shares crept higher following merger-driven gains in Europe and on Wall Street, though investors were wary in case coming figures on Chinese manufacturing again disappointed. The dollar, euro and yen were locked in narrow ranges.

DATA AHEAD (GMT)

0145 China HSBC Flash Manufacturing PMI April

0700 France Markit Flash Manufacturing PMI April

0730 Germany Markit Flash Manufacturing PMI April

0800 Euro zone Markit Flash Manufacturing PMI April

1345 U.S. Markit Flash Manufacturing PMI April

1400 U.S. New home sales March

PRICES

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

Three month LME tin

($1 = 6.2375 Chinese yuan)

(Reporting by Manolo Serapio Jr.; Editing by Ed Davies)