Mining shares have surged to the top of the FTSE 100 after China cut its interest rates.
The country, a key consumer of commodities, said its central bank – the People’s Bank of China – reduced its one year lending rate by 40 basis points and its deposit rate by 25 basis points. It has also unveiled reforms giving banks more freedom to set deposit rates. This is the first move in two years.
Metal prices have been under pressure on fears of a slowdown in China’s economy, with iron ore in particular hit hard. This had had a knock-on effect on mining shares, but this latest news has seen a revival in the sector.
So Anglo American has added 49.5p to £13.43, while Rio Tinto has risen 102p to £29.67. Glencore is up 11.2p to 334.65p while BHP Billiton is 53p better at 1635.5p.
Five of the top ten risers in the FTSE 100 are currently mining shares and this has helped the leading index climb 57.80 points to 6736.7.
via The Guardian