Oct 2 (Reuters) - Copper prices rose on Monday in a relatively quiet session as some Asian markets were on holiday, with investors breathing a sigh of relief after the U.S. government avoided a shutdown.

Three-month copper on the London Metal Exchange rose 0.7% to $8,326.50 per metric ton by 0728 GMT, nickel gained 1.3% to $18,930, lead advanced 0.5% to $2,181 and zinc increased 0.7% to $2,668.

LME aluminium rose 0.8% to $2,366 a ton and tin edged up 0.1% to $23,955.

The U.S. Congress passed a stopgap bill on Saturday to avert a government shutdown, boosting risk-on mode.

The dollar was firm in early Asian trading hours, but started to fall around 0600 GMT when London traders could trade for the first time following Saturday's news, making greenback-priced metals cheaper to holders of other currencies.

Prices of metals were mostly down during early Asian trading hours, but rebounded in tandem with the dollar.

Meanwhile, China's factory activity expanded for the first time in six months in September, official data showed, suggesting a stabilising economy.

However, trading volume was tepid as top metals consumer China is shut for public holidays until Oct. 8.

Supply pressure is also keeping a lid on a rally in copper prices, with inventories of copper in LME-registered warehouses surging 141% in the past three months to their highest since May last year.

Copper output in top producer Chile rose 2.7% year-on-year in August to 434,206 tons.

"Recent build-up in inventories at the LME and rebounding mine supply in Chile and Peru capped the upside," wrote ANZ in a note.

Nickel inventories in LME warehouses climbed to 42,228 tons, the highest since April 3. Tin and lead stocks have also been rising in LME warehouses.

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(Reporting by Mai Nguyen in Hanoi; Editing by Krishna Chandra Eluri)