(Reuters) - London copper hit a one week high on Monday on hopes that central banks around the world will step in to fuel economic growth after concerns about the U.S. jobs sector and gloomy China factory data. A contraction in China's factory sector activity intensified in August as output and new orders dropped, while manufacturers cut prices to compete for business, a survey showed on Monday. The HSBC Purchasing Managers' Index fell to a seasonally adjusted 47.6, the lowest level since March 2009. The reading was little changed from a flash, or preliminary, estimate of 47.8 and was lower than 49.3 in July. The data, the latest evidence of the slowdown in the world's second-largest economy, precedes a September 7 report on U.S. jobs growth that many investors believe is key to any decision on launching another bout of stimulus measures, especially after U.S. Federal Reserve Chairman Ben Bernanke expressed concern about employment levels in the country. Bernanke on Friday left the door wide open to a further easing of monetary policy, saying the stagnation in the U.S. labor market was a "grave concern", but he stopped short of providing a clear signal of imminent action. "The market is still looking to the major central banks around the world to step up to the plate and support policy and growth," said senior metals strategist Nick Trevethan at ANZ bank in Singapore. "The market is a bit disillusioned by China's policy inaction. We think China has to do something fairly drastic, maybe a 50, or even 100 basis point cut in the reserve requirement ratio because its repo action doesn't seem to have been especially effective." The People's Bank of China has been using short-term reverse repos since May to adjust liquidity in the market's main money rate, the seven-day repo rate, in more nuanced moves to support its economy than RRR or direct interest rate cuts. Three-month copper on the London Metal Exchange had ticked up 0.45 percent to $7,648 per tonne by 0712 GMT. It earlier hit $7,679 per tonne, the highest since August 24. Copper closed August up 0.6 percent and has edged into positive territory for the year, but is still down about 13 percent from the year's peak hit in February. The most active December copper contract on the Shanghai Futures Exchange climbed 1.37 percent to 56,180 yuan ($8,800) per tonne. This week, investors will be focusing on a pivotal European Central Bank policy meeting on Thursday, in which chief Mario Draghi is expected to announce concrete steps to cut borrowing costs for indebted euro zone nations. LEAD STOCKS DROP LME lead prices have been supported by recent drawdowns from LME stocks. The spread between cash and the three-month contract on the LME hit the narrowest in four months on Friday, reflecting tightening supply that traders said was mostly consumption related. LME stocks have dropped by almost a third over the past two weeks, and this could trigger a spike in short-term prices in September, traders and warehouse officials said. Available stocks in LME-registered warehouses have slumped by about 92,000 tonnes, or 32 percent, since August 13, and half of those drawdowns are due for delivery out of Singapore, draining the port of all but 1,725 tonnes of metal.

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