Consequently, Anglo American climbed 62½p to £13.88, while Rio Tinto added 125p to £30.90, BHP Billiton rose 47p to £16.60½ and Glencore advanced 8.35p to 320.6p.
As if the numbers from China – which analysts said could have been boosted by one-off factors – were not enough, “buy” advice from brokers Canaccord Genuity and Credit Suisse gave investors another reason to look at the resources sector. Shares in the London-listed mining giants have been hit in recent weeks by heavy falls in metals prices, but the experts at Canaccord told investors to prepare for a rally.
“We see more upside potential than downside risk, and recommend building positions in this period of share price weakness,” they said. “While some commodities are currently in oversupply, in the longer term we see growing deficits for many commodities as a result of dramatic cuts in new project development.”
The “large diversified mining equities” are the place to put your money, the analysts advised. “The majors are well positioned on the cost curve and are still in a position to consider increasing shareholder returns; it is generally the smaller single commodity plays that are struggling.”
Credit Suisse analysts were also casting their eye over Anglo American and liked what they saw.
“Commodity prices have clearly weakened; however, our confidence in management delivering on targeted cost savings, capex reductions, and divestments has not,” they said, and upgraded to “outperform".
Precious metals miners Randgold Resources, up 184p at £43.81, and Fresnillo, 29½p higher at 778½p, also gained ground, buoyed by a rise in the price of gold, which remained in favour for its defensive qualities.
Staying with the gainers, hopes that public service broadcasters will be allowed to charge Virgin Media and BSkyB to carry their main channels lifted ITV 1.3p to 197.2p. Viacom, which took ownership of Channel 5 last month, has backed a campaign by ITV and Channel 4 calling for the introduction of so-called retransmission fees, a move that “gives the story further momentum”, Liberum told clients.
Meanwhile, small-cap radio streaming group 7digital leapt 15.625p, or 77.2pc, to 35.875p after confirming it is in talks with pop star Will.i.am about providing music services to his forthcoming range of wearable devices.
In the FTSE 250 – 97.6 points lower at 14,543.98 – Synergy Health, a provider of sterilisation services, was the biggest riser, surging 31.4pc, a gain of 440p to £18.40, after disclosing it had agreed to be bought by American rival Steris for $1.9bn, in a cash and paper offer that values the FTSE 250 group at £19.50 a share. The deal is being structured in such a way that will enable Steris to cut its tax bill, despite the US Treasury recently attempting to stamp-out such takeovers.
Indeed, Jefferies analysts on Monday recommended buying shares in another potential takeover target, AstraZeneca, in part because they believed the new Treasury measures would not deter US rival Pfizer from reviving its bid interest, after failing to buy the FTSE 100 company earlier this year. AstraZeneca closed 55½p better at £43.55½.
Elsewhere in the healthcare sector, Smith & Nephew slid 14½p to 976½p amid disappointment that its spray-on treatment for leg ulcers had failed a late-stage trial.
Brewer Diageo was another faller, losing 5½p to £17.24 on worries about its first-quarter update on Thursday, which Sanford C Bernstein analysts said was “likely to be weak, but not as bad as some fear”.
Shares in technology companies such as microchip designer Arm Holdings and Bluetooth group CSR remained out of favour and fell 20½p to 822p and 26p to 645p respectively. Microchip Technology, a US semi-conductor maker, shook investor confidence by warning last week that it had seen faltering demand from China. The slowdown has raised fears that the US group will pull out of bid talks for CSR. The Takeover Panel put up or shut up deadline for a deal expires on Wednesday.
Finally, Tesco slumped 4.65p to 180.6p on a warning that the disruption caused by the investigation into its £250m profit overstatement may “create operational paralysis” at the under pressure supermarket group. “Tesco’s ability to operate could be compromised at a critical period ahead of the start of the build up to Christmas trading,” said Mike Dennis of Cantor Fitzgerald, adding that the investigation was likely to involve staff surrendering laptops and postponing supplier meetings.