Sector movers: Miners gain on Chinese stimulus hopes

9th Oct 2012 16:00

The mining sector shrugged off some disappointing growth figures out from the International Monetary Fund (IMF) on Tuesday to trade broadly higher on hopes of economic stimulus in China.China's central bank injected 265bn yuan (£26bn) into the world's second-largest economy in reverse repurchase agreements overnight.Zhou Xiaochuan, the governor of the People's Bank of China, said that while the external environment for China's economic growth is "very grim", the central bank will keep the continuing and stability in monetary policy and will "make policy more pre-emptive, targeted and effective".Heavyweight mining stocks on the FTSE 100 were performing well this afternoon, with Vedanta topping the list despite reporting sluggish production figures in the second quarter. The miner said that output and sales of iron ore from Goa dropped in the period as the government's ban on mining activities in the state starts to bite.Rio Tinto was making gains despite admitting at an investor seminar this afternoon that market conditions in the short-term are likely to remain volatile. The shares were given a lift today by UBS which raised its target price on the stock from 4,600p to 4,700p and reiterated its 'buy' rating. The broker said that Rio "offers the greatest leverage [within the UK diversified mining sector] to a recovery in commodity demand in China, which we expect to occur from Q4 12 as large infrastructure projects approved earlier in 2012 take hold." Sector peer BHP Billiton was also in demand after pricing a five-year one billion Australian dollar note, its first return to the Australian bond market in 11 years. The issue was heavily oversubscribed, according to Reuters.In small caps news, shares in AIM-listed mining company Conroy Gold and Natural Resources leapt after the firm discovered two new gold targets at the Slieve Glah licence area in County Cavan, Ireland. Meanwhile, emerald producer Gemfields rose after posting a 140% leap in profit before tax and exceptional items for the year ended June 30th after revenue from emerald and beryl sales more than doubled. Top performing sectors so far todayForestry & Paper 7,039.08 +1.87%Mining 18,488.52 +1.55%General Retailers 1,878.02 +1.33%Industrial Metals & Mining 2,732.24 +0.84%General Industrials 3,265.39 +0.04%Bottom performing sectors so far todayConstruction & Materials 3,350.90 -2.14%Tobacco 35,938.68 -2.07%Fixed Line Telecommunications 2,615.35 -1.86%Software & Computer Services 898.36 -1.78%Household Goods & Home Construction 7,477.64 -1.51%BC