
China Fears Bury Mining Stocks
NEW YORK (
) -- Mining stocks are in the red amid reports that China may be cooling down its stimulus measures.
Rio Tinto
(RTP)
stock experienced one of the biggest drops, down 5.1% at $227.60.
In what could be indicative of broader monetary policy tightening in China, Chinese Chief banking regulator Liu Mingkang told
Bloomberg
Wednesday that some banks have been asked to implement lending caps after falling short of meeting certain requirements.
This comes a day after Premier Wen Jiabao said China will be managing the pace of credit growth,
Bloomberg
reports.
China's economy grew by about 8.5% last year, according to
Bloomberg
, leading the way for a global economic recovery. But officials appear eager to cool down this rapid pace of growth amid rising signs of inflationary pressure.
China's December consumer price index (CPI) rose faster than November's 0.6% increase from a year earlier, according to
Dow Jones Newswires.
The index likely rose 1.7% from a year earlier in December and the producer price index was up 0.5%, according to the median forecast in a
Dow Jones Newswires
poll of economists.
Vale
(VALE) - Get Report
stock has fallen by 3.5% to $30.10, while
Arcelor Mittal
(MT) - Get Report
has tumbled by 5.3% to $44.60.
BHP Billiton
(BHP) - Get Report
has fallen by 4.1% to $77.70.
Barrick Gold
(ABX)
has lost 5.5% at $37.50, while
Goldcorp
(GG)
is down by 5.7% at $38.
Despite fears that the country credited with leading the world out of the economic doldrums is about to enter a slowdown, CreditSights continues to see China and other emerging markets as primary drivers of metals demand fueled by stimulus measures and infrastructure projects.
CreditSights believes that profits at metals and mining companies are poised to rebound relative to 2009 based on higher prices and continued cost reduction efforts, while balance sheet recapitalizations have largely been completed.
Newmont
(NEM) - Get Report
is down by 5.8% at $45.60, and
IAMGold
(IAG) - Get Report
is down by 7.3% at $15.30.
Freeport McMoRan
(FCX) - Get Report
is down by 2.7% at $82.30.
-- Reported by Andrea Tse in New York
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