Investing.com -- Shares in London-listed mining firms advanced on Tuesday, buoyed by fresh stimulus measures out of China.
On Tuesday, the People’s Bank of China (PBOC) said it is now set to cut reserve requirements for banks by 50 basis points to unlock more liquidity. New measures will also allow funds and brokers to access the central bank's pool of funds to purchase stocks.
Meanwhile, for the ailing property market, the government said it would reduce mortgage rates for existing loans. Bloomberg reported that the government was planning at least 500 billion yuan ($70.8 billion) of liquidity support for local stocks.
The moves come after the PBOC slashed a short-term repo rate on Monday in a bid to further boost liquidity.
Officials in China are pushing to shore up growth as the domestic economy struggles with persistent disinflation and an extended property market downturn. Investors have long urged Beijing to roll out sweeping stimulus measures, although it remained uncertain if the moves amounted to the massive "bazooka" aid markets had been seeking, according to Reuters.
Metal prices spiked on hopes China's measures would spur on demand. Gold prices touched fresh record highs in Asian trade, extending a recent run of gains. Among industrial metals, copper prices rose sharply after the announcement.
The jump in metals gave a subsequent lift to industrial miners in London. Anglo American (JO:AGLJ) surged by more than 7%, Rio Tinto (NYSE:RIO) added 4.8%, Antofagasta (LON:ANTO) grew by 6.2%, and Glencore (OTC:GLNCY) rose by 4.9% in midday trading.
Broader equities, in particular luxury stocks, increased in Europe, as the measures helped to ease some fears over the outlook for China, the world's second-biggest economy.
"Overall, we feel today's measures are a step in the right direction, especially as multiple measures have been announced together rather than spacing out individual piecemeal measures to a more limited effect," analysts at ING said in a note to clients.
"[T]here is still room for further easing in the months ahead as most global central banks are now on a rate-cut trajectory. If we see a large fiscal policy push as well, momentum could recover heading into the fourth quarter."