(Reuters) - Copper prices inched lower on Friday, reversing gains from the previous session, while investors await output and inflation data from China for cues on the growth of the world's second-largest economy.

FUNDAMENTALS

* Three-month copper on the London Metal Exchange edged down 0.1 percent to $8,093.25 a tonne by 0103 GMT, on course for second straight weekly drop.

* The most-traded August copper contract on the Shanghai Futures Exchange inched down 0.2 percent to 57,650 yuan ($9,100) a tonne.

* LME copper stocks dropped for a 13th consecutive session to 219,850 tonnes, the lowest since October 2008. While the ratio of cancelled warrants to total stocks stood at 21.4 percent, easing from over 40 percent in late April.

* Investors are eyeing Chinese industrial output as well as inflation data, after Thursday's trade data showed copper imports slumped to multi-month lows in April.

* The number of Americans submitting new applications for jobless benefits edged down last week, easing concerns the labor market was deteriorating after surprisingly weak employment growth in April.

* The release of a key bailout payment to Athens and Spain's move to clean up its banks helped soothe financial markets, but the sentiment remains fragile as investors watch Greece struggle to cobble up a new government amid strong anti-austerity sentiment.

* China's central bank warned of continued risks of inflation, driven in part by rising labor costs, while pledging to increase two-way flexibility in its yuan exchange rate in a quarterly report released on Thursday.

* Vale (VALE5.SA), the world's second-biggest nickel producer, said on Thursday it would suspend sales and purchase agreements at its Goro project on the French Pacific island of New Caledonia after an accident at the mine's sulfuric acid plant.

* French bank Natixis (CNAT.PA) said it plans to close its commodities brokerage division, as one of the oldest ring-dealing members of the London Metal Exchange becomes the latest victim of the European debt crisis.

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MARKETS NEWS

* U.S. stock index futures fell sharply on Thursday evening as JPMorgan Chase & Co stunned investors with news that its chief investment office had incurred significant mark-to-market losses that it said could easily get worse. .N

* The euro held steady against the dollar on Friday, after posting modest gains in the previous session after stress in Spanish debt markets eased and Greece secured funds to repay its bondholders.

($1 = 6.3140 Chinese yuan)

(Reporting by Rujun Shen; Editing by Himani Sarkar)