* China Q2 GDP comes in at 7.0 pct vs 6.9 pct in poll
* China floor space sales improve, factory output jumps
* Coming up: U.S. industrial output for June at 1315 GMT (Adds comment, detail; updates prices)
By Melanie Burton
MELBOURNE, July 15 (Reuters) - London copper climbed on Wednesday after a bright reading for China’s factory output and better-than-expected second quarter growth suggested stimulus has fed into industry, improving the outlook for metals demand.
China’s economy grew an annual 7.0 percent in the second quarter, steady with the previous quarter and slightly better than analyst forecasts, though further stimulus is still expected after the quarter ended with a stock market crash.
“Given that we have seen stimulus, I would have expected some stabilisation. GDP came in a tick better than expected, and at least showed no further deceleration,” said analyst Dominic Schnider of UBS Wealth Management in Hong Kong.
“Industrial output figures did show an enormous pick up, floor space sold is turning positive. While one month doesn’t make a trend, I think the base metals will take this as a positive.”
Three-month copper on the London Metal Exchange had risen 1 percent to $5,619 a tonne by 0714 GMT after easing in the previous session. Last week, prices hit their weakest level in six years at $5,240 a tonne.
Shanghai Futures Exchange copper finished up 0.8 percent.
Industrial output growth quickened to 6.8 percent, surprising analysts who expected it to rise 6 percent on an annual basis after an advance of 6.1 percent the prior month.
The floor area of property sold rose 3.9 percent from the year-earlier period. Analysts watch the indicator as a gauge of health in China’s property market, a major driver of metals demand.
But prices were volatile over the day as China’s main stock indexes sold off, with a rally that began in China last week after a slew of government steps to halt a crash abruptly running out of steam.
“China’s copper demand conditions remain fragile in mid-2015 but if the current equity market volatility is contained, then copper should be the metal best placed to rally,” Standard Chartered said in a research note.
LME nickel was up more than 1 percent and ShFE nickel rallied more than 2 percent. Wild swings continue, as some investors bet supply will tighten, while others see ample stockpiles in China.
Standard Chartered said that low nickel prices, which hit a six month trough last week, are set to accelerate cuts in China’s nickel pig iron sector, which should boost nickel demand from stainless mills.
“There remains ample inventory both in China and ex-China to solve the deficits projected over the next two years so unless we see some large production cuts to deepen those deficits, there is no impinging sense of scarcity. “
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
Reporting by Melanie Burton; Editing by Richard Pullin and Joseph Radford