* Stock market falls demonstrate investor caution
* Lead and zinc slide to more than three-month lows
* Nickel hits weakest since June 2016
* LME-SHFE arb: tmsnrt.rs/2oQ5nm2 (Releads, updates with closing prices)
By Jan Harvey
LONDON, April 18 (Reuters) - Copper, lead and zinc hit three-month lows on Tuesday and nickel dropped to its weakest since June as geopolitical worries from sabre-rattling over North Korea to a snap UK general election hurt investor appetite for cyclical assets such as base metals.
"There is still some uncertainty in the market about geopolitical issues, and there is some risk aversion at this stage," ABN Amro analyst Casper Burgering said.
"A small deficit (in copper) is expected this year and demand is very good ... but that hasn't benefited the metal."
Losses across the base metals saw aluminium give up early strong gains made after traders returned from a four-day Easter break to news of forthcoming capacity cuts in China. Shanghai aluminium futures hit a near four-year high on Monday.
"There is still a lot of oversupply in aluminium, and a lot of stocks, and that oversupply has depressed prices for quite some time," Burgering said. "Now you see there are initiatives to cut capacity in China and prices are moving."
* PRICES: London Metal Exchange copper closed 2.1 percent down at $5,573 a tonne, having touched its weakest since early January at $5,569.
LME Aluminium dipped by 0.9 percent to $1,892 a tonne, off an earlier one-week high of $1,958.50, while LME lead was the day's biggest faller with a slide to a three-month low of $2,098 before closing 6 percent down at $2,105.
In other metals, LME Zinc closed with a 3.8 percent decline at $2,525, having touched its lowest since December at $2,517. Tin ended 0.7 percent down at $19,475 and nickel finished 4.5 percent lower at $9,310 after hitting its lowest since June at $9,305.
* FINANCIAL MARKETS: Shares and the dollar both fell as British Prime Minister Theresa May called a snap general election, adding to a lengthening list of uncertainties for investors already on edge over North Korea and a tight presidential race in France.
* NORTH KOREA: U.S. Vice President Mike Pence reassured Japan of American commitment to reining in North Korea's nuclear and missile ambitions after warning that U.S. strikes in Syria and Afghanistan showed the strength of its resolve.
* INDONESIA EXPORTS: Freeport McMoRan Inc has received preliminary approval to resume copper concentrate exports from its Indonesian operation and is now in the process of obtaining an export permit, a company spokesman said.
* ALUMINIUM CAPACITY: Three new aluminium projects with a capacity of 2 million tonnes have been halted in Xinjiang in western China for violating rules aimed at curbing capacity, state-owned China Securities Times reported on Sunday.
* SPECULATIVE POSITIONING: Hedge funds and other money managers increased their net long positions in COMEX copper, U.S. Commodity Futures Trading Commission data showed on Friday.
Additional reporting by James Regan in Sydney; Editing by Mark Potter and David Goodman