Investors are finally seeing potential in European mining shares, as China’s step-by-step economic stimulus is steadily laying the foundations for a recovery of the unloved sector.

The STOXX Europe 600 mining index has fallen 15% this year, making it the worst performing sector in the region by some margin, with second-placed real estate down 4.5% and the top-performing retail index up 27%. The metals and mining sector is typically used as a proxy for equity investors in Europe to gain exposure to China, given it is the world’s largest commodities consumer, and it has sunk along with China’s growth expectations. The world’s second-largest economy has been struggling after a brief post-Covid surge, dragged down by huge debt due to decades of infrastructure investment and a property downturn. Analysts forecast the economy will grow by just 5% this year, the slowest rate, outside of Covid years, since 1990. But Beijing in recent weeks has taken targeted steps towards supporting key pockets of its economy, lifting the mining sector off its 31-month lows. In the last month, the mining index has risen nearly 10% compared with a gain of j
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