Mining stocks rally across the board
Lackluster gold and silver prices, a middling performance for copper and other base metals, fresh multi-year lows in iron ore and renewed worries about demand in China did not deter investors from jumping back into mining stocks on Wednesday.
The positives of a falling oil price for miners struggling to keep down costs amid falling commodity prices and perhaps a realization that recent falls may have been overdone appear to be filtering through to the market. Reassuring words from the Federal Reserve about the state of the US economy also boosted sentiment.
American depository receipts of the top three miners trading in New York were swept up in general market euphoria amid a surge in US stocks markets which enjoyed their best day for the year.
World number one BHP Billiton (NYSE:BHP) jumped 2.3% despite relying on oil and iron ore for more than three-quarters of earnings, top iron ore miner Vale (NYSE:VALE) added nearly 4% and Rio Tinto (NYSE:RIO) climbed 4.8% adding almost $3 billion in market value on the day.
Swiss-based Glencore (LON:GLEN) is not traded in New York and lost out on the bonanza. The world's fourth largest miner after absorbing X-strata last year moved sideways in London, but with a 6% decline in value this year is outperforming peers which are nursing falls of between 50% (Vale) and 20% (Rio Tinto) year to date.
Anglo American (LON:AAL) shares moved nearly 2% for the better while Canada's Teck Resources (TSX:TCK) was the best performer among the diversified heavyweights adding 10.5% after an analyst upgrade and news of its first shipment of zinc and lead (together with nickel the best performing metals this year) from its restarted Pend Oreille mining operations in northeastern Washington State.
Copper and gold giant Freeport-McMoRan (NYSE:FCX) jumped 4.4%, Southern Copper Corp (NYSE:SCCO) managed a more modest gain of 2.5% while fellow South American copper producer Antofagasta (LON:ANTO) advanced by the same number.
Number one listed uranium miner Cameco Corp (TSE:CCO) jumped 2.7% while Potash Corp of Saskatchewan (TSE:POT), worth $34 billion in Toronto, added just over 3%. The fertilizer giant is a standout among big cap resource companies – gains for the year now stand at 17%.
Despite a gold price down 3.5% in just over a week, slipping to around $1,190 an ounce on Wednesday, gold-focused miners were some of the best performers on the day.
Global number one Barrick Gold Corp jumped 4.6%, while fellow Canadian counter Goldcorp (TSX:G), at $16.9 billion the world's most valuable gold miner, surged 5.1%.
Vancouver-based gold and silver streaming firm Silver Wheaton (TSE:SLW) climbed a whopping 8%. Yamana Gold (TSE:YRI) and Agnico Eagle Mines (TSE:AEM), responsible for the biggest gold sector acquisition in some time when it bought Osisko's Malartic mine in Quebec earlier this year for over $4 billion, gained 5.8% and 6.1% respectively.
Further down the market cap list the gains were also pronounced with Canadian mid-tier companies IAMGold (TSE:IMG) climbing 10.5%, Eldorado Goldcorp (TSE:GLD) up 7.7% and Kinross Gold (TSX:K) clawing back some of its losses suffered earlier in the week.
Punters' favourite Randgold Resources ADR's trading on the Nasdaq (LON:RSS, NASDAQ:GOLD), jumped 7.6% on the day, launching it back into positive territory for the year. Fellow Africa-focused miners AngloGold Ashanti (NYSE:AU) and Gold Fields gained 8.5% and 8.3% respectively.
South Africa's Harmony Gold (NYSE:HMY) advanced 6.5% while its partner on a massive new gold mine in Papua New Guinea Australia's Newcrest Mining (ASX:NCM) was up 3.7% in early trade in Sydney.