Investors glimpse opportunity in Europe's unloved mining shares

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

Investors are beginning to recognize the potential in European mining shares as China's gradual economic stimulus paves the way for a recovery in this overlooked sector. The STOXX Europe 600 mining index has experienced a decline of 15% this year, making it the worst-performing sector in the region. In comparison, the real estate sector has seen a 4.5% drop, while the retail index has shown a remarkable 27% increase. The metals and mining sector is often seen as a means for European equity investors to gain exposure to China, given its status as the world's largest consumer of commodities. Consequently, as China's growth expectations have declined, so too has the sector. The second-largest economy has faced challenges due to significant debt resulting from decades of infrastructure investments and a slowdown in the property market. Analysts predict that China's economy will only grow by 5% this year, marking the slowest rate since 1990, excluding the years affected by the COVID-19 p

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Source: reuters.com