Shares in Britain’s largest mining companies added around £14 billion in value on Monday after the United States and China agreed to sharply scale back tariffs in a move that eased global trade tensions and lifted investor sentiment.
The rally followed a surprise deal between the world’s two biggest economies to temporarily reduce tariffs on each other’s goods, ending months of market-rattling uncertainty.
Under the agreement, which followed intensive negotiations in Geneva, the US will lower tariffs on Chinese imports from 145% to 30%, while China will cut its duties on American goods from 125% to 10% for an initial 90-day period.
Miners led gains on the FTSE 100 as the truce raised hopes of stronger industrial demand in China, a major consumer of metals such as copper and iron ore.
Investors bet that easing trade frictions would support global manufacturing and commodity prices, which have come under pressure during the prolonged trade dispute.
Global markets surged on the news, with US futures and Asian indices all sharply higher.
Glencore PLC (LSE:GLEN), while a major miner also has a commodity trading arm, was the biggest beneficiary of the news, with its shares advancing 6.4%.
Antofagasta PLC (LSE:ANTO), Anglo American PLC (LSE:AAL) and Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) also registered gains in the 5-6% range.