* Hopes wane of stimulus from European Central Bank, Fed * China PMI data points to growth stabilisation * Coming next: U.S. PMI data; 1400 GMT By Silvia Antonioli and Melanie Burton LONDON/SINGAPORE, Aug 1 (Reuters) - Copper softened on Wednesday as support from a weaker dollar was offset by data showing the manufacturing sector contracted in the euro zone and hardly grew in top metals consumer China in July, worsening prospects for metals demand. Benchmark copper on the LME traded at $7,531 a tonne by 0921 GMT, down 0.4 percent from $7,560 at the close on Tuesday. It earlier fell to a session low of $7,487.50, its lowest since Friday. A weaker U.S. currency, which makes dollar-priced commodities more attractive to holders of other units, was not enough to offset weak manufacturing data released on Wednesday. The euro zone's manufacturing sector contracted for the 11th straight month in July as output and new orders plummeted, a business survey found, suggesting the downturn is deepening in the bloc's core countries. China's official factory purchasing managers' index fell to an eight-month low of 50.1 in July, suggesting the sector is barely growing, while a rival HSBC survey indicated the more market-sensitive private sector is starting to recover. The Chinese manufacturing data signalled that the private and state-backed parts of China's vast factory sector are stabilising - albeit at a relatively low level of growth. "There is not so much optimism in the market right now despite the dollar weakness, due to a combination of weak growth prospects and lower expectations of actions by the central banks," said Eugen Weinberg, head of commodities research at Commerzbank. "The eurozone PMI does not help market sentiment but at least today's PMI data from China not falling below 50 signalled some growth stabilisation. It is also encouraging that Chinese officials want to support the economy." China home prices broke eight straight months of decline in June in a tentative sign that pro-growth policies are gaining traction in the world's second biggest economy. Market participants are now looking towards China's August PMI figures which they believe will be a better indicator of the health of the world's second largest economy. STIMULUS HOPES WANE U.S. monetary authorities will hold a policy briefing later on Wednesday. Few analysts expect the Fed to launch more easing at the end its two-day meeting, but it is expected to reinforce a commitment to an accommodative stance and could drop hints about more measures in coming weeks. The European Central Bank meeting on Thursday also remains a key focal point for the market which will be looking for policy action from the ECB to shore up the debt-laden euro zone. "Macro news and currency issues will continue to dominate sentiment for the foreseeable future," RBC Capital said in a note. Meanwhile, European banks are shrinking commodities trading operations much faster than their U.S. rivals and reducing risk-taking to insignificant levels to relieve the burden on their capital levels. Also, top miners Rio Tinto and BHP Billiton announced on Wednesday fresh cost cutting measures to cope with sliding commodities prices and stuttering growth. Tin was at $18,025 from $18,100 while zinc, used in galvanising, was at $1,832 from $1,842 at Tuesday's close. Battery material lead was at $1,908.50 from $1,920 and aluminium was at $1,883.25 from $1,891. Nickel was unchanged at $15,865. Traders said Chinese traders are delaying term nickel imports and returning at a discount metal they had bought as China's slowing economy, and maintenance at major stainless steel mills, further cuts consumption. Metal Prices at 0932 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2011 Ytd Pct move COMEX Cu 340.85 -0.90 -0.26 344.75 -1.13 LME Alum 1882.50 -8.50 -0.45 2020.00 -6.81 LME Cu 7523.75 -36.25 -0.48 7600.00 -1.00 LME Lead 1907.50 -12.50 -0.65 2034.00 -6.22 LME Nickel 15838.00 -27.00 -0.17 18650.00 -15.08 LME Tin 17925.00 -175.00 -0.97 19200.00 -6.64 LME Zinc 1830.00 -12.00 -0.65 1845.00 -0.81 SHFE Alu 15420.00 -65.00 -0.42 15845.00 -2.68 SHFE Cu* 54950.00 -230.00 -0.42 55360.00 -0.74 SHFE Zin 14610.00 -100.00 -0.68 14795.00 -1.25 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

Source