BUZZ-Miners see diminishing returns from China rate cut

** Third China rate cut in six months sees mining sector among best performing in Europe, but moves becoming more muted

** China cuts one-year lending rate by 25 bps to 5.1 pct, cut deposit rate by 25 bps to 2.25 pct

** FTSE 100 miners up 1-2 pct

** Stoxx 600 Basic Resources up 1.3 pct, but far short of the 5.7 pct rally after China's first in the series of rate cuts in November, its best day since September 2012

** Upward moves in iron ore spot prices also relatively light

** Sector has shown signs of improvement in 2015 as spot prices stabilise (up 12 pct) but still lagging Stoxx 600 index

** Trader says next move higher for sector likely to be positioning-related rather than supply/demand though a clear catalyst to kickstart move still lacking

** Mining remains one of fund managers' biggest underweights, according to latest BAML survey

(RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)