* Investors look for opportunities to re-enter nickel market * Weak euro weighs on metals complex (Adds details, quotes; previous SYDNEY) By Eric Onstad LONDON, May 15 (Reuters) - Nickel rebounded on Thursday after plunging 10 percent earlier in the session as investors seized the opportunity to jump back into the market, where there are expectations of future gains as supply shortages become more severe. Nickel prices reached their highest in more than two years on Tuesday with gains of more than 50 percent this year in response to an export ban by top ore supplier Indonesia in January. But investors became wary that prices had raced ahead of the underlying fundamentals and selling snowballed as a wave of option holders also liquidated hedge positions. Nickel is expected to bounce back as long as Indonesia keeps squeezing supply and stainless steel producers can absorb higher prices. "Talking to lots of investors and speculators, if they haven't already bought into the nickel story, any correction was their opportunity to do so. There won't be any dearth of buyers," analyst Robin Bhar at Societe Generale said. "There is a core bullish argument because of Indonesia, but there's also lots of froth. You have to look at how much of the recent price rise has been genuine based on the fundamentals and how much is pure speculative activity." Three-month nickel on the London Metal Exchange slumped to $18,090 a tonne at one point, a drop of 9.8 percent from Wednesday. Prices were trading down 7.1 percent at $18,615 by 0954 GMT, trimming the year's gains to 35 percent. Stop-loss sales were triggered around $19,000 and around$18,500-19,000, traders said. Many investors are happy to keep buying because they are confident that a ban on unprocessed ore shipments by top exporter Indonesia will not be lifted after elections. "When the new government comes in October, it's very unlikely that this is going to be top of their agenda. They have the full support of the trading community and the entire mining community is just thrilled," analyst Mark Keenan at Societe Generale in Singapore said. WEAK EURO WEIGHS Other metals were easier, pressured by a weaker euro that makes commodities priced in dollars more expensive for buyers in Europe. The euro fell to a six-week low against the dollar on expectations the European Central Bank is poised to ease policy at next month's meeting. Losses were moderated in some metals after news that China was increasing its support for its wobbly trade sector with a raft of new measures that include giving more tax breaks, credit insurance and currency hedging options to its exporters. LME copper pared loses to trade down 0.1 percent at $6,910.50 a tonne after a 1.1 percent advance in the previous session to the highest in more than two months. Adding support to copper prices, the LS-Nikko copper plant in South Korea was expected to halt production for at least two weeks after an explosion caused injuries, sources with knowledge of the matter said on Wednesday.

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