Miners and banks pace gains

On Wednesday, it was Anglo American’s turn at the top of the leader-board, with gains of 6.31% to 799.95p, with stock in StanChart – whose exposure to the sector is well-known - drafting close behind and rising 3.47% to 560.75p.

In parallel, Rio Tinto was sporting gains of 3.32% to 2,410.5p and BHP was up by another 3.0% to 994.2p.

Their latest advance came amid a 2.6% advance in three-month copper futures to $4,929.50 per metric tonne on the LME.

Broker Investec also boosted its target prices for a raft of stocks in the sector arguing that a bottom was now un place for the sector, albeit cautioning that the moves in miners’ equity prices could not be justified on the basis of the slight improvement seen in China’s fundamentals.

A team of analysts led by Hunter Hillcoat lifted tehir recommendation on shares of BHP Billiton from ‘sell’ to ‘hold’ and lifted its target from 739p to 987p.

Rio Tinto’s target was also boosted from 2,235p to 2,562p, that on Glencore from 63p to 117p and for Anglo American from 303p to 502p.

The upward revision to Glencore’s target was the largest, following by Acacia Mining (from 184p to 328p) and Centamin (from 79p to 119p).

For Investec, the drivers of stock prices had been the weakening seen in the US dollar and improved sentiment towards the outlook for growth in China.

“The bottom of the market [for stocks in the sector] appears to have been tested and found, but we do not see this as the beginning of a renewed bull market,” Hillcoat said.

As of 16:08 the DJ Stoxx sub-index of Basic Resource shares was up by 2.08% to 310.52

In Europe, it was a slightly different story, with the Stoxx 600 bank sector gauge pacing gains with an advance of 2.09% to 153,54.

The likes of HSBC and RBS were also near the top rungs of the Footsie, despite ominous remarks from ex-Bank of England governor Sir Mervyn King, who told Bloomberg TV that ”governments are putting off the things which needed to be done […] some countries need to spend less and save more, and other like China and Germany need to spend more domestically and export less.

“Central banks need to argue much more forcefully that monetary policy is not the answer to everything, negative interest rates show that policies are facing diminishing returns.”