MARKETS-METALS (UPDATE 3) * China denies it is reviewing euro-zone bond holdings * Euro surges, U.S. stock index futures signal gains * Coming up: U.S. preliminary Q1 GDP at 1230 GMT (Adds fresh comment/details, changes dateline from Singapore) By Maytaal Angel LONDON, May 27 (Reuters) - Copper rose nearly 2 percent on Thursday as panic paused over euro zone debt and investors eyed a bounce in the euro and gains in wider financial markets like oil and equities. Benchmark copper for three-months delivery on the London Metal Exchange traded at $6,890.50 a tonne at 0926 GMT, from a close of $6,779 on Wednesday. Prices of the metal used in power and construction hit a day's high of $6,908, down from last week's three-month low of $6,415. The euro surged on Thursday, buoyed by short covering and after comments from an official in China alleviated some concerns that the country may be distancing itself from euro zone debt holdings. A stronger euro makes metals cheaper for European investors. European shares, U.S. stock index futures and oil were all up. "It looks like the market is bottoming out. Macro data yesterday was positive. People are saying hang on Europe aside, things are improving elsewhere ... spot premiums are high, cancelled warrants are ok, there's a fear we saw a healthy correction but it might have been overdone," said Andrey Kryuchenkov, analyst at VTB Capital. Supporting sentiment were positive U.S. housing and durable goods data from the United States on Wednesday, and a less bleak assessment of the world economic outlook from the OECD. The global economy is recovering faster than expected from recession with Asia leading the way, but is at risk from debts in developed countries and possible overheating in countries such as China, the OECD said on Wednesday. In a twice-yearly report, the Paris-based Organisation for Economic Co-operation and Development raised its forecast for global growth to 4.6 percent in 2010 and 4.5 percent in 2011. Last November it predicted growth of 3.4 percent this year and 3.7 percent in 2011, after a 0.9 percent contraction in 2009. The market now awaits preliminary second-quarter U.S GDP data, due at 1230 GMT. UNDERLYING "The outlook for the underlying real economy remains positive with demand for industrial metals expected to increase strongly. The OECD's latest economic forecasts back up this view," Standard Bank said in a note. "The main area of concern however remains whether the problems in southern Europe can be contained. If the metals can detach themselves and instead focus on the real economy, the outlook remains positive." Indicating still good demand, LME copper stocks fell 1,275 tonnes to 477,775 tonnes, their lowest point since December, while aluminium stocks dropped 3,525 tonnes to 4.56 million tonnes, having fallen consistently since last Wednesday. Although total aluminium stocks remain near record highs, most of the material is tied up in financing deals and unavailable to the market. As a result, spot premiums for physical aluminium are rising. Aluminium was at $2,035 from $2,015, zinc was at $1,929 from $1,890, while battery material lead was at $1,809.50 from $1,755. South Korea has issued a tender to buy 500 tonnes of high-grade primary lead ingot for Aug. 4 shipping to the port of Kunsan, the state-run Public Procurement Service said on Thursday. Tin was at $17,749 from $17,575, and nickelwas at $21,700 from $21,115. Metal Prices at 0932 GMT Metal Last Change Percent Move End 2009 Ytd Percent move #VALUE! LME Alum 2015.00 0.00 +0.00 2230.00 -9.64 LME Cu 6886.00 107.00 +1.58 7375.00 -6.63 LME Lead 1790.00 35.00 +1.99 2432.00 -26.40 LME Nickel 21400.00 285.00 +1.35 18525.00 15.52 LME Tin 17625.00 50.00 +0.28 16950.00 3.98 LME Zinc 1906.00 16.00 +0.85 2560.00 -25.55 SHFE Alu 15260.00 15.00 +0.10 17160.00 -11.07 SHFE Cu* 55320.00 430.00 +0.78 59900.00 -7.65 SHFE Zin 15865.00 75.00 +0.47 21195.00 -25.15 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Editing by Sue Thomas)

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