Mining companies flying high

London’s equity benchmark is up 0.9% as mining stocks get a lift by positive manufacturing figures from China.

China’s manufacturing PMI came in at 50.1 in August, comfortably ahead of analysts’ expectations for a reading of 48.3, to confirm a large turnaround in Chinese manufacturing.

July’s reading had dropped to an 11-month low, but this latest update swung to a four-month high. Mining stocks have broken a three-day losing streak after the positive report, and should Chinese manufacturing continue to expand natural resource stocks go trade higher.

Despite reporting a 35% drop in first half pre-tax profit Kazakhmys is now up 1% – the miner’s financial problems are well known but the positive news out of China has given the sector a boost.

Just ahead of the US open, the Dow Jones is forecast to open 30 points higher at 14,927. The Federal Reserve remained divided over when to begin tapering its stimulus package, and with some traders taking the view that it won’t start until December, there is a more bullish sentiment today.

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