* Copper down 0.2 pct on LME; down 2 pct on ShFE * High borrowing costs of Spain, France raise concern * Greek police clash with protesters * Fitch warns of cut in "stable" rating outlook for U.S. banks * Coming Up: U.S. CFTC commitment of traders data weekly; 2030 GMT (Updates prices, adds quotes, details) By Carrie Ho SHANGHAI, Nov 18 (Reuters) - Copper fell on Friday, dragged down by rising fears of euro zone debt contagion after borrowing costs for Spain and France spiked. Analysts are also eyeing Fitch Ratings' warning that it may reduce its "stable" rating outlook for U.S. banks with large capital markets businesses, implying high exposure to euro zone debt woes. Three-month copper on the London Metal Exchange fell 0.2 percent to $7,528.25 a tonne by 0729 GMT, after falling 2.5 percent previously. It is on track to post a weekly drop of 1.4 percent in a third straight week of weaker prices. "It is still all about worries over the euro zone and the firmer dollar today, which is distracting traders from everything else. There hasn't been any other news big enough for us to take trading cues from," said a Singapore-based trader. "Copper prices have been pushed around by euro zone woes with Spain's borrowing costs up. Equities last night also set a bearish tone for base metals today," said a Sydney-based trader. Greek police clashed with anti-austerity protesters and Italy announced sweeping reforms in response to a European debt crisis that on Thursday pushed borrowing costs for France and Spain sharply higher. The Spanish government was forced to pay the highest borrowing costs since 1997 at a sale of 10-year bonds, with yields a steep 1.5 points above the average paid at similar tenders this year, drawing descriptions from the market ranging from "pretty awful" to "dreadful". "For me the significant news was Fitch Ratings' warning that it may cut the rating outlook for U.S. banks for fear of contagion problems from Europe," said Dominic Schnider, global head of UBS Wealth Management Research. Fitch Ratings warned it may reduce its "stable" rating outlook for U.S. banks with large capital markets businesses, because of contagion from problems in troubled European markets. "But copper prices really haven't moved much today. ShFE copper opened weak as a reflection of what happened in overseas markets the day before and gained some traction throughout the session. It's just a sideways movement really," Schnider added. The most-active February copper contract on the Shanghai Futures Exchange slipped 2 percent to 55,550 yuan ($8,746.93) per tonne, catching up with previous losses in London. It rose 0.6 percent on Thursday but closed the week down 0.1 percent. The December ShFE copper contract last traded at a premium of 1,000 yuan to the February contract, with a spike in trading volumes for the prompt month near session end, indicating strong dip-buying interest from consumers. On a more positive note for the euro zone, the European Central Bank is ready to show some flexibility in tackling the region's debt crisis, despite vocal resistance by a German-led group of ECB policymakers to the bank's unleashing the overwhelming firepower it can muster. Base metals prices at 0729 GMT Metal Last Change Pct Move YTD pct chg LME Cu 7528.25 -16.75 -0.22 -21.58 SHFE CU FUT FEB2 55550 -1130 -1.99 -22.69 LME Alum 2100.00 6.00 +0.29 -14.98 SHFE AL FUT JAN2 16000 -130 -0.81 -4.99 HG COPPER DEC1 339.65 1.40 +0.41 -23.49 LME Zinc 1905.00 -22.00 -1.14 -22.37 SHFE ZN FUT FEB2 15040 -215 -1.41 -22.77 LME Nickel 17870.00 -280.00 -1.54 -27.80 LME Lead 1997.00 -17.00 -0.84 -21.69 SHFE PB FUT 15230 -165 -1.07 -17.00 LME Tin 21400.00 50.00 +0.23 -20.45 LME/Shanghai arb 445 Shanghai and COMEX contracts show most active months ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month

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