Material ETFs Gain on China Optimism

NEW YORK (TheStreet) -- Material and mining ETFs are attracting buyers on Monday morning as China is set to replace Japan as the world's second-largest economy. The gains in the sector are helping to offset market weakness following poor manufacturing and housing data.

The SPDR S&P Metals and Mining ETF(XME) is rising 1.4%. Its top holdings include Freeport McMoRan(FCX), up 1.4%, and Cliff Natural Resources(CLF), up 2.2%. Other gainers include Market Vectors Steel ETF(SLX) and Market Vectors Coal ETF(KOL), rising 1.4% and 1.2% respectively. The PowerShares DBB Base Metals Index, which tracks the price of widely-used base metals such as aluminium, zinc and copper, is gaining 1.3%.

Demand for safe-haven assets continues to rise amid weak market confidence. ETFs investing in treasuries, gold and silver are all up on Monday forenoon trading. Demand for silver ETFs outpaced that of gold, with the iShares Silver Trust(SLV) gaining 1.8% while the popular SPDR Gold Shares(GLD) is up only 0.8%.

The SPDR Home Builders ETF(XHB) and the iShares Dow Jones US Home Construction (ITB) is heading lower by 0.7% and 0.2% respectively after the home-builders index fell to a 17-month low.

-- Reported by Shanthi Venkataraman in New York.

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