* London copper eyeing biggest weekly loss since Oct 2008 * Shanghai metals fall by daily limit * Risk reduction extends on hazy economic outlook (Updates prices, milestones) By Manolo Serapio Jr MANILA, Sept 23 (Reuters) - London copper extended losses in another brutal sell-off on Friday to hit its lowest in more than a year and is on course for its steepest weekly loss since October 2008 amid a bleak outlook for the global economy. Other base metals also sank, with nickel falling nearly 9 percent and tin down as much as 13 percent at one stage, while Shanghai-traded metals slid by their daily limit as investors liquidated risky assets with Europe struggling to contain a debt crisis, the U.S. economy in bad shape and China's manufacturing sector shrinking for a third month in a row. "At this stage it's very sentiment driven, and sentiment right now is bearish. The market is focusing on the macroeconomic environment, which is not very positive," said Natalie Robertson, an analyst at Australia and New Zealand Bank. Three-month copper on the London Metal Exchange fell 7.3 percent to as low as $7,115.75 a tonne, a level not seen since Aug. 25, 2010. By 0601 GMT, it stood at $7,124, down 7.2 percent. Friday's drop puts copper's two-day loss at more than 14 percent, after the metal slid 7.5 percent on Thursday, its biggest percentage fall since Oct. 30, 2008. For the week, copper is down more than 17 percent, its widest since late October 2008, when it shed more than 21 percent during the global financial crisis. "Technically copper appears oversold in the short term, but it would take a brave man to stand in front of this train," Citi said in a note. In Shanghai, the most active December copper contract fell by its 6 percent daily limit to 56,940 yuan a tonne, the lowest ever for the contract. Zinc, lead and aluminium futures also hit their downside limit for the day. Private sector business activity in Europe and China declined sharply this month, and new claims for U.S. jobless benefits remained high, crystallizing fears that the global economy could lapse back into recession. The major risk to the global economy is in Europe, with investors "generally unhappy with the lack of action in the euro zone in addressing its sovereign debt issues," ANZ's Robertson said. Meeting in Washington on Thursday, the world's major economies pledged to prevent the euro zone's debt crisis from undermining banks and markets but announced no new specific measures to shore up confidence in the global economy. Following copper's lead, LME zinc hit a session low of $1,913 a tonne, its weakest since July 2010, and lead dropped to $2,005, a level unseen since August 2010. Tin fell more than 13 percent to $17,205 a tonne, a low dating back to early July 2010, and nickel slid almost 9 percent to $17,200, slightly above Thursday's trough of $17,000. Base metals prices at 0601 GMT Metal Last Change Pct Move YTD pct chg LME Cu 7124.00 -550.00 -7.17 -25.79 SHFE CU FUT DEC1 56940 -3320 -5.51 -20.75 LME Alum 2195.00 -33.00 -1.48 -11.13 SHFE AL FUT DEC1 16325 -655 -3.86 -3.06 HG COPPER DEC1 321.95 -26.90 -7.71 -27.48 LME Zinc 1910.00 -98.00 -4.88 -22.17 SHFE ZN FUT DEC1 14980 -875 -5.52 -23.08 LME Nickel 17240.00 -1640.00 -8.69 -30.34 LME Lead 2016.25 -88.75 -4.22 -20.93 SHFE PB FUT 14470 -775 -5.08 -21.14 LME Tin 17400.00 -2450.00 -12.34 -35.32 LME/Shanghai arb -3644 Shanghai and COMEX contracts show most active months ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month (Reporting by Manolo Serapio Jr.; Editing by Clarence Fernandez)

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