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METALS-Copper hits 2-1/2 month high after European factory PMIs

(Updates throughout, changes dateline from Sydney)

LONDON, June 23 (Reuters) - Copper prices firmed on Friday to their highest since April 7 as industrial metals benefited from rising Chinese stock markets and strong European manufacturing data, while falling inventories put zinc on track for its best week since November.

"Positive sentiment around China and a rise in manufacturing PMIs out of Europe are supporting base metals prices," said Danske Bank analyst Jens Pedersen.

Investors were looking ahead to U.S. manufacturing data due at 1345 GMT, he said.

LME COPPER: London Metal Exchange copper was up 1.5 percent at $5,827 a tonne by 1053 GMT, having touched a 2-1/2 month high of $5,854.50.

COPPER TECHNICALS: The metal used in power and construction was set for its best week since mid-March and on Friday rose above its 200-day moving average of $5,773. A close above this level could trigger technical buying.

EUROPE MANUFACTURING: Europe's manufacturing PMI beat expectations and climbed to a more than six-year high.

CHINA: Blue-chip stocks closed at an 18-month high after sentiment was lifted by MSCI's decision to include Chinese shares in a key index this week. China is the world's largest consumer of industrial metals.

LME ZINC: Three-month zinc was up 1.4 percent at $2,737.50 a tonne, taking gains this week to 8.3 percent, the most in seven months. The metal is trading at three-month highs.

ZINC STOCKS: Cancelled warrants -- metal earmarked for delivery -- in LME-registered warehouses rose to 73 percent after 22,575 tonnes of new cancellations. Total stocks have fallen by about 30 percent since January to 301,900 tonnes. <MZNSTX-TOTAL>

ZINC SPECULATORS: Warrant cancellations were focused in LME warehouses in New Orleans, indicating that speculators rather than real demand were responsible, Commerzbank analysts said in a note. "We therefore regard the response of the zinc price as exaggerated," they said.

ZINC TECHNICALS: Zinc has moved above its 100-day and 200-day moving averages this week, stimulating technical buying.

ZINC SPREAD: The discount of cash zinc to three-month metal fell to $2.75 from $19 in mid-June, indicating a reduction in easily available metal. <CMZN0-3>

DOLLAR: The U.S. currency weakened, supporting dollar-denominated metals by making them cheaper for holders of other currencies.

CHINA IMPORTS: Chinese imports of refined metals fell in May.

PRICES: Aluminium was up 0.6 percent at $1,881 a tonne, lead gained 0.9 percent to $2,224, tin was up 1 percent at $19,450 and nickel advanced by 2 percent to $9,205. (Additional reporting by Melanie Burton and James Regan; Editing by David Goodman)