Sector movers: Miners pace gains as Chinese factory data beats forecasts

Industrial miners paced gains on a mixed day for the stock market following the release of stronger-than-expected factory sector surveys in China.

The Purchasing Managers' Index from private sector survey compiler Caixin rose from January's level of 49.2 to 51.6 (consensus: 51.3) for last month.

In parallel, the 0fficial manufacturing PMI jumped from 50.1 to 52.6 (consensus: 50.7).

An average for the two factory surveys improved from 49.6 to 52.1 - the best reading since late 2020, Julian Evans-Pritchard, head of China Economics at Capital Economics pointed out.

Nevertheless, according to Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said that the ability of the economy to recover with little policy support thus far meant that the new Chinese premier would likely announce a moderate economic support package at the National People's Congress that was due to start on 5 March.

"The strong PMI data means that PBoC probably will hold off this month from broad rate cuts to boost private sector confidence, while it monitors data to assess the strength of the demand rebound," Wrigley added.

In the background, three-month LME copper futures advanced 1.81% to $8,961.0 per metric tonne on the back of the Chinese data.

Precious metals miners also fared well as a soft US dollar, in part triggered by the same Chinese figures, sparked buying in gold futures with the front-dated gold contract on COMEX adding 0.41% to $1,844.20/oz..

Sterling however missed out on the price action, ending the day flat, after Bank of England Governor, Andrew Bailey, cautioned against "suggesting either that we are done with increasing Bank Rate, or that we will inevitably need to do more."

Worth noting, over the last couple of sessions Fed funds futures had moved to price in roughly 50% odds that short- term official interest rates might rise as high as 5.5-5.75% in the third quarter, versus their current target range of 4.5-4.75%.

Top performing sectors so far today

Industrial Metals & Mining 7,584.76 +3.85%

Precious Metals and Mining 10,606.33 +3.15%

Industrial Engineering 15,612.75 +2.66%

General Industrials 6,497.13 +1.67%

Automobiles & Parts 1,680.36 +1.56%

Bottom performing sectors so far today

Household Goods & Home Construction 11,099.45 -5.04%

Gas, Water & Multiutilities 5,757.15 -2.78%

Real Estate Investment Trusts 2,356.37 -1.95%

Electricity 10,529.27 -1.76%

Non-life Insurance 3,263.37 -1.19%