Sector movers: Central banks spark mining surge in mining sector

30th Nov 2011 15:00

With global stock markets toasting the news of a co-ordinated action by central banks and China's efforts to boost its economy, there were no sectors in the red on Wednesday afternoon.Mining stocks, which have been sensitive to global macro-economic developments over the last few months, were the worst performers early on but roared higher at lunchtime on reports that the People's Bank of China had lowered the legal reserve requirement for Chinese banks by 50 basis points in a move to free up more funds for lending. This was the first cut since December 2008.Shortly after, equities were given an extra boost as the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve and the Swiss National Bank took co-ordinated action to ease strains in financial markets by making it cheaper for banks to buy dollars. Under today's arrangement the banks have agreed to lower the pricing on existing temporary US dollar liquidity swap arrangements by 50 basis points. Joshua Raymond, chief market strategist at City Index, said the move sent a "clear and sincere message" that the major Central Banks of the developed world had a strong determination to bring financial markets back from the brink. "At a time when European leaders are failing to act, Central Banks are stepping up to the plate and this is giving investors a much needed confidence boost," he said. The miners jumped on the news on the back of easing fears over the global economy, with heavyweights Antofagasta, Kazakhmys and Xstrata making gains of at least 7% each on the FTSE 100.The best performing miner of the day though was AIM-listed gold miner Solomon Gold, which rocketed over 30% after upping its resource estimates for the Rannes Project, the second time it has done so in two months. The inferred mineral resources estimate for wholly-owned project in Central Queensland has now been increased by 20% from 675,779oz to 812,000oz. This follows the 24% upgrade reported in late September. BCTop performing sectors so far todayMining 20,340.41 +5.41%Personal Goods 20,039.85 +5.04%Industrial Metals & Mining 4,368.86 +4.23%Automobiles & Parts 4,482.07 +3.90%Banks 3,360.04 +3.89%Bottom performing sectors so far today