* Stock markets rise on earnings optimism * Copper inventories rise again (Recasts, updates dateline to LONDON from SHANGHAI) By Rebekah Curtis LONDON, Oct 12 (Reuters) - Copper prices rose on Monday as a recent raft of improving data brightened the demand outlook, but optimism was capped by a fresh rise in inventories. Copper for three-months delivery MCU3 on the London Metal Exchange traded at $6,285.50 a tonne at 0942 GMT from a close of $6,230 on Friday. "For aluminium and copper there should be a seasonal pick-up in the fourth quarter," said Andrey Kryuchenkov, analyst at VTB Capital. "But it won't be as pronounced as in previous years. The first quarter of 2010 looks a bit better." "Sentiment is upbeat because of data, but sentiment alone is not enough to push the market to new highs," he said, adding fundamentals need to improve before prices could forge higher. Last week the market was lifted by upbeat data on the U.S. service sector and on German manufacturing. [ID:nN05400003] [ID:nL7400974] But a new rise in copper stocks capped upbeat sentiment. Inventories at LME warehouses rose 775 tonnes to 347,375 tonnes, their highest level since mid-May. Stocks have been rising since mid-July, reversing a trend of nearly constant falls earlier this year. Trade was relatively quiet as industry insiders gathered in London for the annual London Metal Exchange week, where the outlook for metals prices is expected to be keenly discussed. Trading volumes at the LME could reach record highs hit in 2008 this year, due to high price volatility, LME Chief Executive Martin Abbott said. [ID:LC536987] For more on LME Week, click on: here corner "The world economy is by no means out of the woods, but in our view the theme during LME Week will be the prospect of demand recovery in 2010," Royal Bank of Scotland said in a note. "Yet we would still urge producers to be very cautious about embarking on price induced as opposed to demand induced reactivation." Reflecting the upbeat mood, equities rose on optimism about the third-quarter earnings season. [MKTS/GLOB] CHINA EYED Copper, used in power and construction, has doubled in value so far this year, supported by buying from China, the world's top consumer of the metal. Investors are keenly eyeing whether strong demand from China will resume after recently waning, and when OECD demand might start to recover. Investors are also eyeing China's preliminary September trade data, due on Wednesday, to see whether demand from the world's top consumer of base metals is holding up. Imports of unwrought copper and semi-finished copper products are expected to fall for the third straight month, after record imports in the first half of the year. [ID:ID:nHKG142718] Aluminium MAL3, used in transport and packaging, traded at $1,932 from $1,909. The metal hit a day's high of $1,936, its highest since mid-September. Zinc MZN3 was at $2,070 from $2,033 and battery material lead was at $2,293 from $2,249. China's Henan Yuguang Gold & Lead Co Ltd (600531.SS: Quote, Profile, Research), the country's top lead producer, said on Saturday the smelter would shut down its sintering system which can produce 4,000 tonnes of lead bullion. [ID:nSHA231018] Tin MSN3 was at $14,750 from $14,800 and nickel MNI3 traded at $19,049 from $18,750. Metal Prices at 0949 GMT Metal Last Change Pct Move End 2008 Ytd Pct move COMEX Cu 283.00 0.15 +0.05 139.50 102.87 LME Alum 1945.00 36.00 +1.89 1535.00 26.71 LME Cu 6285.00 -45.00 -0.71 3060.00 105.39 LME Lead 2288.00 39.00 +1.73 999.00 129.03 LME Nickel 18925.00 175.00 +0.93 11700.00 61.75 LME Tin 14600.00 -200.00 -1.35 10700.00 36.45 LME Zinc 2065.00 32.00 +1.57 1208.00 70.94 SHFE Alu 14895.00 50.00 +0.34 11540.00 29.07 SHFE Cu* 49100.00 270.00 +0.55 23840.00 105.96 SHFE Zin 15810.00 80.00 +0.51 10120.00 56.23 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Editing by Sue Thomas)

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