Barclays downgrades Antofagasta, upgrades Rio

Barclays downgraded Antofagasta but upgraded Rio Tinto on Thursday as it took a look at European metals and mining stocks, arguing that the China pivot has room to run.

"China's reopening and ‘whatever it takes’ approach to the property sector are tectonic shifts that should underpin an acceleration in commodity demand through 2023," Barclays. It added that further measures to bolster consumer confidence/job creation/growth cannot be ruled out.

"Allied with ongoing growth in energy transition-related commodity demand, supply side underinvestment and potential bottoming out in ex-China commodity demand, 2023 is set to be another strong year for the miners and steels," the bank said.

Barclays said it sees attractions in laggards Glencore and Norsk Hydro, both of which are rated ‘overweight’, given looming energy tightness as China reopens.

The bank downgraded Antofagasta to ‘equalweight’ from ‘overweight’ following sharp outperformance, but lifted the price target to 1,450p from 1,275p

It upgraded Rio to ‘equalweight’ from ‘underweight’ and hiked the price target to 5,800p from 4,300p. Barclays said it was neutralising the rating given policy shifts.