Mining stocks were in favour today after stronger data from China´s construction sector sparked a rally in metals prices.
China´s construction Purchasing Manager´s Index (PMI) activity gauge climbed to its highest level in over three and half years on the back of state sponsored infrastructure projects.
Chinese iron ore futures rose by as much as 8% while big blue-chip mining stocks were also buoyed by the news.
China´s construction sector PMI increased to 62.5 in July compared with June´s 61.4, indicating the sector is enjoying its strongest activity levels since late 2013.
Construction appears to be by far the best-performing segment of the Chinese economy at present, with China´s overall PMI at just 51.4 in July, down from the prior month´s 51.7 reading.
Overall, the PMI data showed activity had slowed in both China´s manufacturing and services sectors for the month.
China´s economy grew by more than expected during the second quarter, with annual growth of 6.9%. Continued strength in the housing market was behind much of the positive surprise.
Despite the Chinese authorities attempts to cool the housing market, property investment accelerated by 8.5% over the first half of the year, outpacing the 6.9% growth registered over the same period during 2016.
Big mining stocks rallied early today, with miners BHP Billiton, Anglo American and Antofagasta up 2.6%, 3% and 2.3% respectively in London trade.
In particular, Anglo American shares have been on a tear of late, having risen by around 24% over July. Last week the company announced it was reinstating the dividend earlier than expected, reporting strong first-half earnings and falling debt.