Sept 9 (Reuters) - Most base metals fell on Wednesday, pressured by a stronger U.S. dollar and a slump in stock markets and oil prices, but shrinking LME inventories supported benchmark copper prices.

The most-traded Shanghai copper contract closed down 1.3% at 51,830 yuan ($7,566.20) a tonne, while three-month copper on the London Metal Exchange was up 0.1% at $6,677 a tonne by 0701 GMT.

Sentiment was bleak after Wall Street sank for the third consecutive session on losses in heavyweight technology companies, and as oil futures hit lows not seen since June.

"There is more talk of 'risk-off', but this still feels more like an unwinding of overbought positions, rather than a generalised flight to safety," said Robert Carnell, head of research for Asia-Pacific at ING.

The greenback held its gains as risk appetite waned, making dollar-denominated metals more expensive for holders of other currencies.

"While prices crumbled...trading volumes remained very thin, suggesting that many are sitting on the sidelines for the time being," ING commodities strategists said in a note.

Tensions between Washington and Beijing added to the dour sentiment, with the United States preparing orders to block imports of cotton and tomato products from western China's Xinjiang region over allegations of forced labour.

FUNDAMENTALS

* Copper's sizzling rally triggered by historically low stocks and strong consumption in China has further to run if the link between Chinese demand and credit availability in the top consumer fully reasserts itself.

* Copper inventories in LME-registered warehouses and in Comex-registered warehouses in the United States declined, but inventories in Chinese warehouses have risen.

* LME aluminium was down 0.4% at $1,785.50 a tonne, zinc dipped 0.2% to $2,412, nickel dipped 0.7% to $14,790, but lead gained 0.2% to $1,907.

* Shanghai aluminium dropped 1%, zinc sank 2.9%, nickel slumped 2.9%, and lead dipped 2.3%. (Reporting by Enrico Dela Cruz in Manila; Editing by Amy Caren Daniel and Devika Syamnath)