Sector movers: Miners in demand as weak China data lifts stimulus hopes

LONDON (ShareCast) - It was a case of bad data being good news for the mining sector on Thursday as stocks surged on hopes for further stimulus in China. A HSBC survey said the Chinese manufacturing purchasing managers' index fell from 49.6 to a one-year low of 49.2, surprising analysts who had expected no change.

Economist Chris Williamson from Markit (NasdaqGS: MRKT - news) said the soft data added to the chance of more policy measures from the world's top metals consumer to boost growth.

"The drop in the PMI in April clearly represents a disappointing start to the second quarter, raising the possibility of economic growth having lost further momentum compared to the already-weak rate seen in the opening quarter of the year," he said.

The People's Bank of China (HKSE: 3988-OL.HK - news) last week lowered its reserve requirement ratio by more than economists expected in an aggressive move to promote bank lending.

Mining peers Antofagasta (Other OTC: ANFGF - news) , Anglo American (LSE: AAL.L - news) , Rio Tinto (Xetra: 855018 - news) , BHP Billiton (NYSE: BBL - news) and Fresnillo (Other OTC: FNLPF - news) were all rising around 3-4% in afternoon trade.

Anglo in particular was in demand after saying it delivered a "solid" production performance in the first quarter, in line with its expectations despite two of its three largest divisions experiencing declines in output.

The company held on to full-year production guidance for most of its commodity classes, except the diamond segment which was lowered "in light of current trading conditions".