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METALS-Copper and nickel drop on demand worries, investor shift to equities

SYDNEY, June 2 (Reuters) - Copper and nickel prices inched down on Friday, undermined by concerns over weakening demand and oversupply.

Traders also said that some investors were shifting away from "hard" commodities into stocks following robust U.S. and European industrial data.

FUNDAMENTALS

LME COPPER: Three-month copper on the London Metal Exchange had slipped 0.3 percent to $$5,682 a tonne by 0100 GMT.

* SHANGHAI COPPER: The most-traded copper contract on the Shanghai Futures Exchange was 0.18-percent lower at 454,390 yuan ($66,794) a tonne.

* ARGENTINA MINING: Argentina's government will sign an agreement with provincial governors on Monday to unify some policies regulating the mining sector.

* LME NICKEL: Benchmark nickel was trading 0.5-percent lower at $8,795 a tonne. Nickel declined for a third straight month in May and hit its lowest since June last year overnight. The contract has tumbled 12 percent this year, the biggest drop among major base metals.

SHANGHAI NICKEL: Shanghai Futures Exchange nickel was down 1.12 percent. The contract fell 1.20 percent and 3.4 percent in the previous two sessions respectively.

* PARIS DEAL: President Donald Trump on Thursday said he would withdraw the United States from the landmark 2015 global agreement to fight climate change, a move that fulfilled a major campaign pledge but drew condemnation from U.S. allies and business leaders.

* JAPANESE LIFT: Japan's Nikkei share average rose above the psychologically important 20,000-point level to the highest since August 2015 on Friday as strong U.S. stocks and the rising dollar lifted investors' risk appetite.

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MARKETS NEWS

* ASIA STOCKS: Asian stocks edged up on Friday and the dollar bounced from recent lows as upbeat data on U.S. manufacturing and employment and buoyant European factory growth boosted investor optimism.

* OIL DOWN: Oil prices dropped nearly 1 percent in early Asian trade, dragged down by concerns of a global glut in crude supply despite a bigger-than-expected draw in U.S. crude inventories.

DATA/EVENT AHEAD (GMT) 0730 EU-China Business Summit with speakers including European Commission President Jean-Claude Juncker and Chinese Prime Minister Li Keqiang

0900 Euro zone Producer prices Apr 1230 U.S. Nonfarm payrolls May 1230 U.S. Unemployment rate May 1230 U.S. International trade Apr 1345 U.S. ISM-New York index May

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminum

Most active ShFE aluminum

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

ARBS ($1 = 6.8029 Chinese yuan renminbi)

(Reporting by James Regan; Editing by Joseph Radford)