(Recasts, updates prices, changes dateline, adds quote/details)

By Naveen Thukral

LONDON, Feb 12 (Reuters) - Zinc fell for a third session onTuesday, hitting its lowest in more than two weeks, as thedollar held near a two-month high and investors remainedconcerned about global economic growth.

In wider markets, global equities rallied as investors grewmore optimistic about U.S.-China trade talks and cheeredWashington's deal to avoid another government shutdown, but thiswas not enough to lift metals. MKTS/GLOB

"The rational for higher (metals) prices right now is notstacking up," said Bank of America-Merrill Lynch analyst MichaelWidmer.

"There (has been) higher confidence that maybe if we get atrade deal we'll get higher prices, if China data improves we'llget higher prices. But realistically, for now, the U.S. isslowing, Europe is going nowhere and China is finding it hard tostimulate its economy."

He added, however, that zinc should find support at about$2,400 to $2,500 a tonne because of tight stocks.

Benchmark zinc CMZN3 on the London Metal Exchange shot upby nearly a fifth in the month to Feb. 5, when it touched aseven-month peak of $2,810 a tonne, but has since slipped. Ittraded down 0.4 percent in official midday rings at $2,634.50 atonne on Tuesday, having hit a low of $2,626.50.

* ZINC STOCKS: Underpinning zinc, data showed LMEinventories of the metal MZNSTX-TOTAL eroded further to theirlowest since January 2008.

* ZINC TECHNICALS: Zinc attracted additional selling onMonday after it breached the 200-day moving average at$2,662.51.

* SPREADS: Cash zinc traded at a premium of $1 a tonne tothe three-month price, off a high of $125 in early December,though Citi said the reduced tightness in the spreads waslulling the market into "a false sense of looseness".

* DEMAND: "The seasonal demand pick up in the second quarterhas the potential to almost wipe out (zinc) exchange stocks. Ourshort-term point price target remains $2,800, but by the end ofthe year we expect zinc to trade down to $2,400," the bank said.

* TRADE TALKS: U.S. Trade Representative Robert Lighthizerarrived in the Chinese capital on Tuesday ahead of high-leveltrade talks scheduled this week for the world's two largesteconomies to hammer out a deal ahead of a March 1 deadline. urn:newsml:reuters.com:*:nL3N2072YK

* THYSSENKRUPP: German steel-to-elevators group Thyssenkrupp TKAG.DE on Tuesday warned of a darkening economic backdrop,including a weakening automotive market, signalling tough timesfor its capital goods business ahead of a planned separation. urn:newsml:reuters.com:*:nL5N2070WC

* OTHER METALS: Copper CMCU3 traded down 0.5 percent inrings at $6,118, aluminium CMAL3 traded down 0.7 percent at$1,866, lead CMPB3 traded up 0.1 percent at $2,048, nickel CMNI3 was last bid down 0.2 percent at $12,470 while tin CMSN3 was last bid down 0.4 percent at $20,950.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS http://tmsnrt.rs/2lvmIzW

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Naveen ThukralEditing by David Goodman and Kirsten Donovan) ((maytaal.angel@thomsonreuters.com(00442075429105)(ReutersMessaging: maytaal.angel.thomsonreuters.com@reuters.net)))

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