* Euro, short covering help spur copper gains * Markets eye China data later this week (Adds details, updates prices) By Melanie Burton SHANGHAI, Feb 8 (Reuters) - London copper advanced towards four-month highs on Wednesday as investors were cautiously optimistic of an eventual deal on a delayed Greek bailout package. Politicians in Athens have yet to sign off on painful austerity measures that are a condition of a second bailout package and have again pushed back the deadline for agreement to Wednesday. But market players believe Greece is close to a deal. "The fact that a deal on Greece has been pushed back is neither here nor there -- the situtation in Europe will come to a resolution," said analyst Matt Fusarelli of Australia-based consultancy AME Group. Three-month copper on the London Metal Exchange rallied 1.7 percent to $8,626.50 a tonne at 0801 GMT, having been steady for most of the session . Copper has rallied almost 12 percent so far this year and was within reach of a four-month high of $8,679.50 hit on Jan. 27. The most-traded April copper contract on the Shanghai Futures Exchange rose 2.27 percent to 61,390 yuan a tonne. Elsewhere on the LME, nickel reached a new five month high for a second day, and tin hit a 6-month peak. " The fundamental picture is also looking a bit better than it did a month ago, especially in the U.S., and we're coming into a peak consumption period for copper," Fusarelli said, referring to the second quarter, typically a strong period for copper demand. Fresh signs emerged of a pick-up in the U.S. economy last week when data showed it created jobs at the fastest pace in nine months in January. Markets will be closely watching data out of China for indications on the health of the world's second-largest economy amid a festering euro zone debt crisis. China is the world's top copper consumer, accounting for around 40 percent of refined copper demand last year. "Consensus is that imports will be lower than record levels in December. It's hard to predict by how much -- on the one hand we had week-long holidays in January, but on the other we have seen imported stocks increase," said Shanghai-based analyst Judy Zhu of Standard Chartered. Chinese imports of refined copper rose 18.3 percent in December on the month to a record high due to improved arbitrage and increased use of copper for financing purposes, but inflows fell 3 percent in 2011 from 2010 on low imports in the first half. Also, copper stocks in warehouses monitored by the Shanghai Futures Exchange surged by more than one third over two weeks in January, latest data showed, because of strong imports and slower consumption during the Lunar New Year holidays. But traders reported still tepid consumer demand for copper in China, post January's week-long Lunar new year holidays. They said that gains the in the euro and solid equities helped to spur short-covering. The euro hit a fresh two-month high versus the dollar on Wednesday, supported by hopes that Greece may soon agree to austerity steps and avoid a disorderly default. Chinese preliminary trade data is due on Friday. There is also Chinese inflation data scheduled for release on Thursday that may have implications for metals, Credit Suisse Private Banking said in a note. "A further deceleration in inflation could open the door for additional cuts in the Reserve Requirement Ratio by the People's Bank of China. This in turn would be good news for cyclical assets such as industrial metals." Price differentials between London and Shanghai copper were still negative for Chinese imports on Wednesday on a three-month basis although there was some narrowing in the price gap for front month copper, which suggested a slight pick up in buys from China's spot market. Cash LME traded at a -$276 price differential against Shanghai front month contract, on Wednesday from -$479 the day before. PRICES Base metals prices at 0801 GMT Metal Last Change Pct Move YTD pct chg LME Cu 8626.50 145.50 +1.72 13.51 SHFE CU FUT APR2 61390 1360 +2.27 10.89 HG COPPER MAR2 392.25 4.65 +1.20 14.16 LME Alum 2270.75 15.75 +0.70 12.41 SHFE AL FUT MAY2 16355 115 +0.71 3.22 LME Zinc 2142.00 22.00 +1.04 16.10 SHFE ZN FUT APR2 16270 260 +1.62 9.97 LME Nickel 22077.00 277.00 +1.27 18.00 LME Lead 2221.00 35.00 +1.60 9.14 SHFE PB FUT 16240.00 190.00 +1.18 6.25 LME Tin 25550.00 55.00 +0.22 33.07 LME/Shanghai arb^ 2141 Shanghai and COMEX contracts show most active months (Editing by Sugita Katyal)

Source