(Recasts; adds comment, detail) MELBOURNE, Nov 16 (Reuters) - London nickel and copper on Thursday edged back towards multi-week lows plumbed in the previous session, with markets jittery after a spate of data showed that China's economy cooled in October. "The weak economic data in China earlier this week has sparked some concerns about demand for stainless steel and nickel in coming months. This was enough for investors to lock in some gains after the 20-percent rally in prices over the past couple of months," ANZ said in a report.
* LME NICKEL: London Metal Exchange nickel had fallen 0.5 percent to $11,635 a tonne by 0623 GMT, extending a decline that began last week after prices hit two-year highs at $13,030 on Nov. 1.
* Nickel's rally was driven by short-covering and investors taking a view on potential battery sector demand, said CRU's Peter Peng in Beijing. "Currently, the stainless steel market is weak as (there has been) too much supply since Q3, (so) nickel prices should fall back to in line with real demand from stainless steel."
* LME COPPER: LME copper slipped 0.2 percent to $6,757.50 a tonne. That was still up from $6,713 a tonne touched on Wednesday, the weakest since Oct. 10. SHFE COPPER: Shanghai Futures Exchange copper lost 0.5 percent to 52,900 yuan ($7,974) a tonne.
* OTHER SHANGHAI METALS: Shanghai nickel and lead both fell more than 1.5 percent, in line with recent weakness in steel on worries that demand may be cooling heading into a seasonally lower period of consumption. Zinc, which has been supported by supply concerns, dropped a more modest 0.7 percent.
* DOLLAR: The dollar was on the defensive on Thursday as doubts on the prospects of U.S. tax reforms offset an uptick in underlying U.S. inflation, while the Australian dollar hovered near four-month lows ahead of key local jobs data.
* INVESTORS: Barclays says total commodity investor assets under management (AUM) have trended steadily higher and are now in excess of $300 billion for the first time since 2013.
* CHINA: China's banking regulator has set new rules for the country's three policy banks to help rein in risks amid a broader tightening of controls over the financial sector.
* COMING UP: U.S. Industrial output Oct at 1415 GMT PRICES
BASE METALS PRICES 0608 GMT Three month LME copper 6755 Most active ShFE copper 52920 Three month LME aluminum 2110.5 Most active ShFE aluminum 15510 Three month LME zinc 3139.5 Most active ShFE zinc 25035 Three month LME lead 2427.5 Most active ShFE lead 18480 Three month LME nickel 11640 Most active ShFE nickel 94280 Three month LME tin 19405 Most active ShFE tin 143190
BASE METALS ARBITRAGE
LME/SHFE COPPER LMESHFCUc3 623.03 LME/SHFE ALUMINIUM LMESHFALc3 -760.53 LME/SHFE ZINC LMESHFZNc3 403.71 LME/SHFE LEAD LMESHFPBc3 -983.51 LME/SHFE NICKEL LMESHFNIc3 2529.06
($1 6.6346 Chinese yuan renminbi)
(Reporting by Melanie Burton; Editing by Richard Pullin and Joseph Radford)