* ECB in line with Fed, BOJ stimulus policy * Chinese physical copper demand expected to increase in Q2 * Coming next: U.S. payrolls data; 1230 GMT By Silvia Antonioli and Manolo Serapio Jr LONDON/SINGAPORE, May 3 (Reuters) - Copper jumped almost 5 percent and was on track for its strongest gain in almost a year and half as economic stimulus moves by central banks raised investor confidence over industrial metals demand growth. Benchmark copper on the London Metal Exchange was up 4.6 percent to $7,160 by 1105 GMT from a close of $6,848 on Thursday, its biggest daily increase since Nov. 30 2011. The European Central Bank (ECB) cut interest rates for the first time in 10 months on Thursday, a day after the U.S. Federal Reserve committed to continue its $85-billion monthly bond-buying program to bolster growth. In a bid to spur lending, the ECB said it was also "technically ready" to cut its deposit rate from the current zero percent into negative territory, meaning it would start charging banks for holding their money overnight. "The market is finally pricing in the fact that the ECB is aligning itself with the Fed and the Bank of Japan, pushing away deflationary worries," said T-Commodity consultancy Gianclaudio Torlizzi. "The ECB action is very important and if you tie this with the fact that commodities have been oversold lately it creates the conditions for a strong rebound. We expect copper to move towards $8,000 by the end of June." Also buoyed by a weaker dollar, copper led gains across the base metals complex, and rose in tandem with Asian equities following the ECB's latest move. MKTS/GLOB But some analysts and traders are wary of whether the price gains will be sustainable. "It's encouraging that central banks are willing and able to provide the liquidity needed to get out of the slump but by and large people are still worried about the message behind them, that growth is not satisfactory," said Sijin Cheng, commodities analyst at Barclays Capital. If copper fails to rise beyond $7,500, a level last seen in early April, it could come back down again, said a trader in Singapore. "I think Asians are trying to keep the market above where they ended in London, but prices are really still vulnerable to more downside," the trader said. RALLY WITH LEGS? Key data to watch for investors will be the U.S. employment report, which will determine if Friday's rally will have legs. U.S. nonfarm payrolls are forecast to have risen by 145,000 in April after hitting a nine-month low of 88,000 in March, according to a Reuters poll of economists. A lower-than-expected increase in private hiring from Wednesday's ADP report raises the risk of a smaller number, although CMC Markets senior trader Tim Waterer said any negative market reaction "may be moderate as a poor result would not give the Fed any reason to pull the quantitative easing plug early". Barclays' Cheng said she still expects physical demand in China, the world's biggest consumer of copper and other base metals, to improve during the second quarter, which should provide further support to prices. "The shorts in the market are also getting quite excessive and people are really piling on their short positions which could provide a bit of a short-covering rally in the second quarter," said Cheng, who sees LME copper averaging $7,920 this year. In other metals, aluminium rose 3 percent to $1,865.75 from a last bid at $1,811 on Thursday. Zinc, used to galvanize steel, was up 2.5 percent at $1,863.75 from $1,819 Thursday's close and battery material lead was also up 2.5 percent at $1,988 from $1,941 Tin rose 1.6 percent to $20,000 from $19,675 and nickel 2.9 percent to $15,151 from $14,675. Metal Prices at 1113 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2012 Ytd Pct move COMEX Cu 323.05 12.85 +4.14 365.25 -11.55 LME Alum 1864.75 -34.25 -1.80 2073.00 -10.05 LME Cu 7142.25 294.25 +4.30 7931.00 -9.95 LME Lead 1986.50 45.50 +2.34 2330.00 -14.74 LME Nickel 15090.00 415.00 +2.83 17060.00 -11.55 LME Tin 19950.00 275.00 +1.40 23400.00 -14.74 LME Zinc 1863.50 44.50 +2.45 2080.00 -10.41 SHFE Alu 14535.00 75.00 +0.52 15435.00 -5.83 SHFE Cu* 51340.00 1500.00 +3.01 57690.00 -11.01 SHFE Zin 14430.00 85.00 +0.59 15625.00 -7.65 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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