1st Dec 2023 12:20
(Alliance News) - London's mining stocks got a boost on Friday, thanks to data from China showing that the country's factory sector swung back into growth in November.
However, some analysts thought the data won't be enough to silence the alarm bells ringing about the overall Chinese economy.
"Miners led the charge after Chinese manufacturing data beat expectations, raising hopes that the Asian superpower will require more commodities from the big natural resources companies on the stock market," said AJ Bell's Russ Mould.
The top of the FTSE 100 index midday on Friday was a roll call of miners. Anglo American was up 7.2%, Antofagasta up 4.7%, Rio Tinto up 3.9% and Glencore up 3.5%.
The Caixin manufacturing purchasing managers' index for China rose to a three-month high of 50.7 points in November from 49.5 in October. The reading above 50 points indicates growth in the sector.
"Demand continued to grow, as the gauge for new orders remained in expansionary territory for the fourth consecutive month, hitting the highest since June," said Wang Zhe, senior economist at Caixin Insight Group. "Compared with consumer goods and intermediate goods, the supply and demand of investment goods were weaker.
"Overseas demand remained sluggish, with the measure for new export orders staying in contraction for the fifth straight month."
However, some commentators weren't impressed.
"We remain sceptical of any signs of recovery in China given the very modest measures taken so far" by the Beijing government, said analysts at Brown Brothers Harriman.
The Caixin PMI moved in the opposite direction from the same indicator issued by the National Bureau of Statistics on Thursday. Its manufacturing PMI reading for November was 49.4 points, still in contraction territory and slightly down from 49.5 in October.
The NBS figures had raised concern, with many expecting the data to prompt calls for additional support from the Chinese government.
China began dismantling its draconian zero-Covid restrictions in December 2022 after almost three years, which allowed the economy to rebound. But that recovery has been hampered by weak consumer and business confidence, a persistent housing crisis, record youth unemployment, and a global slowdown which is weighing on demand for Chinese exports.
By Sophie Rose, Alliance News senior reporter
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