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Mining stocks are in demand on the FTSE for a second day in a row as talks of a Chinese stimulus package are enticing traders to pick up mineral extractors. The Chinese economy is no longer registering double-digit growth rates and it looks like the Beijing administration is going to cushion the landing by using cash injections. Natural resource stocks have been underperforming all year with investors anticipating the Chinese slowdown, and now that there is talk of a stimulus scheme those stocks look relatively cheap.
Overall the economic data out this morning has been in line with expectations, including the UK inflation report, while Germany’s economic sentiment picked up.
Resolution is the best performing financial stock after the insurer posted a 17% increase in six-month pre-tax profit. If the figures from recruitment firm Michael Page are anything to go on, the Bank of England will be keeping rates ultra-low for some time, after the recruiter revealed an 11% decline in half-yearly profit.
In the US, we are calling the Dow Jones to start 60 points higher at 15,479, as the Chinese stimulus hopes push up US index futures.