Sector movers: Miners gain as Chinese inflation slows

9th Apr 2013 15:42

Mining stocks were the best performers in London on Tuesday on the back of inflation data from China, which showed that price rises had slowed dramatically in March.Chinese consumer-price inflation slowed to a 2.1% annual rate in March, down from 3.2% in February when prices soared on the back of the New Year holiday. Analysts had pencilled in a figure closer to 2.5%. Central Bank Governor Zho Xiochuan had said that he was on "high alert" against inflation after price rises in February came in above estimates. The figures today have sparked hopes that the People's Bank of China will hold off from tightening policy for the time being. Qu Hongbin, Chief China Economist from HSBC, said that the worry about inflation risks in February proved to be a "false alarm". He said that inflation would likely stay at 2.0-2.5% over the coming months.Meanwhile, analysts at Barclays said today that the data - whilst in line with its "long-held view of soft near-term growth" - "suggests that activity data to be released next Monday could disappoint". However, it is now thought that lower inflation figures could give policymakers "more room to manoeuvre" to stimulate growth, according to Goldman Sachs.The news that Fitch has decided to cut China's credit rating from 'AA-'to 'A+' seems to have undeterred traders today. Fitch cited a number of "underlying structural weaknesses" in China's economy and said that the "process of rebalancing the economy towards consumption could lead to the economy's performance becoming more volatile".ENRC, Vedanta, Rio Tinto, Xstrata and Glencore were making strong gains on the FTSE 100 today, all trading at least 4.0% higher. BHP Billiton, Anglo American and Antofagasta were also performing well, shrugging off concerns about mining strikes that have hit operations in Chile. Anglo was being supported by the news that it would produce 3.0% more copper this year than the last.There were also some strong risers on the FTSE 250: iron ore group Ferrexpo rocketed after a 10.1% jump in first-quarter pellet production; Kenmare surged after reporting a 20% rise in heavy mineral concentrate in the first quarter; while Centamin revealed record gold production levels at its Sukari mine in the first three months.Top performing sectors so far todayIndustrial Metals & Mining 2,111.04 +6.14%Mining 17,843.85 +4.06%Mobile Telecommunications 4,390.17 +1.69%Banks 4,699.27 +1.23%Fixed Line Telecommunications 3,168.21 +1.23%Bottom performing sectors so far todayChemicals 8,905.16 -4.40%Beverages 14,774.52 -2.13%Health Care Equipment & Services 4,152.38 -1.40%Industrial Engineering 9,240.96 -0.68%Food Producers & Processors 7,363.92 -0.67%BC