Sector movers: Mining stocks lead rebound as risk appetite returns

11th Aug 2014 14:59

Mining stocks were making gains in London on Monday as risk appetite returned after UK equities fell to a four-month low last week.Cyclical sectors such as mining and basic resources had experienced choppy trading in recent weeks as investors sought relatively 'safer' assets which are not as sensitive to economic uncertainty.However, an easing of geopolitical tensions around the globe was behind the improved sentiment on markets on Monday.Rio Tinto was a high riser, up 3% after comments from Canaccord Genuity, which repeated its 'buy' rating on the back of the miner's strong free cash flows in the first half."After a period regaining control over its cash flows, Rio, like many large mining names is now moving towards the happy position of having surplus cash. This is over and above its reduced growth ambitions and need to cut its net debt position," the broker said.Anglo American, Vedanta Resources, Polymetal, Centamin, Antofagasta and BHP Billiton.Economic data from top metals user China was also helping mining stocks on Monday. Figures released over the weekend showed that consumer price inflation remained at 2.3% in July, well below the 3.5% government target. "The bulls may argue that this creates some headroom for policy to remain loose," according to Deutsche Bank.Bucking the trend in the mining sector was African iron ore explorer Bellzone Mining, which plunged almost 30% after it failed to secure long-term financing.Top performing sectors so far todayHealth Care Equipment & Services 5,677.77 +2.36%Mining 18,251.48 +2.25%Forestry & Paper 11,019.10 +2.20%Chemicals 9,977.58 +2.13%Oil Equipment, Services & Distribution 22,880.34 +2.13%Bottom performing sectors so far todayFood & Drug Retailers 3,273.41 -0.32%Electricity 9,311.71 -0.15%Banks 4,391.45 -0.06%BC