* Metals slide 2 percent or more on Wall St contagion * Fragile sentiment may see boost from US payrolls data * Technicals suggest more weakness to come [TECH/C] * Coming Up: U.S. payrolls data; 1230 GMT By Nick Trevethan SINGAPORE, May 7 (Reuters) - Base metal prices dropped 2 percent or more on Friday in London after a suspected clerical error by a trader sparked Wall Street's biggest intraday plunge and highlighted fragile global investor sentiment. U.S. stocks plunged 9 percent in the last two hours of trading on Thursday, with the Dow down 998.5 points -- its biggest ever intraday point drop -- before clawing back some of the losses as a suspected trading glitch and fears of a new credit crunch in Europe threw markets into disarray. The situation remained unclear long after the closing bell as the Nasdaq Stock Market and others said they would cancel multiple erroneous trades. Other exchanges scrambled to examine orders. "This was the worst possible time to screw up. A month ago it wouldn't have had an effect, but this week with investors poised to liquidate, the error was amplified," said Ben Westmore, commodities economist at National Australia Bank. "We have seen inflows into metals in the past few months and those are vulnerable to these kinds of events, which may foreshadows a trailing off of investment flows earlier than expected and a period of weaker prices in the next few months." For a graphic of the link between the .VIX volatility index and commodities, click: here Three-month copper on the London Metal Exchange CMCU3 fell 2.2 percent, or $150, to $6,800, by 0712 GMT after a modest $9 fall on Thursday. "The weakness in the market is contagion from Wall Street's issues. Fundamentals haven't changed, so either metals were overpriced and are returning to fair value, or they are under valued and we will see them recover," a trader in Perth said. "My feeling is that we were overpriced and this is a healthy move. We might see more strength later if U.S. payrolls data comes in strongly," he added. Recent economic data from the United States has been positive, but has been overshadowed by worries about euro zone debt and China's attempts to rein in growth. Benchmark third-month Shanghai copper SCFc3 fell 2.6 percent to close at 54,500 yuan. Shanghai copper was expected to fall further after diving into a lower channel, targeting 52,000 yuan, Reuters technical analyst Wang Tao said. [TECH/C] For a graphic, click: here LME aluminium CMAL3 dropped $43 to $2,061 a tonne. The market earlier dipped as low as $2,050, a near three-month low. Australia's Alumina Ltd (AWC.AX) expects aluminium prices to bottom out at $2,000 a tonne, just below current levels, the company's chief executive said on Friday. [ID:nSYU009883] LME nickel CMNI3 fell 2.2 percent to $21,507. Nickel has been the most volatile metal in recent days, trading in ranges in excess of $2,000 -- about 10 percent of its value. For a graphic, click: here Base metals prices at 0712 GMT Metal Last Change Pct Move End 2009 YTD pct chg LME Cu 6800.00 -150.00 -2.16 7375.00 -7.80 SHFE Cu* 54500.00 -1430.00 -2.56 59900.00 -9.02 LME Alum 2061.00 -43.00 -2.04 2230.00 -7.58 SHFE Alum* 15475.00 -325.00 -2.06 17160.00 -9.82 COMEX Cu** 306.20 -4.15 -1.34 332.75 -7.98 LME Zinc 2075.00 -40.00 -1.89 2560.00 -18.95 SHFE Zin/c 16655.00 -600.00 -3.48 21195.00 -21.42 LME Nickel 21507.00 -493.00 -2.24 18525.00 16.10 LME Lead 1962.00 -39.00 -1.95 2432.00 -19.33 LME Tin 17099.00 -601.00 -3.40 16950.00 0.88 LME/Shanghai arb^ -191 Dollar/yuan 6.8262 \ 6.8272 ** 1st contract month for COMEX copper * 3rd contact month for SHFE aluminium, copper and zinc ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month (Editing by Ed Lane)

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