Finally, there’s some hope for the mining community.
After what seemed like endless months of doom and gloom, there’s now some optimism around mining stocks, and that’s translating into market gains.
Since Sept. 1, the S&P/TSX Composite Index is up about 3.5 per cent. The materials sub-index has jumped more than double that, up around 7.5 per cent. And if you go as far back as May 18, which is when the TSX hit its low during the latest bout of European fears, the broad index has climbed back 9.5 since, while the materials sub-index index jumped 18 per cent.
The recent success is even more astounding when you examine individual companies. Of the 10 worst-performing stocks in the materials sub-index since Sept. 1, five of those 10 stocks have actually posted gains. That means across the entire sector, only five companies have seen their share prices drop.
Let’s not kid ourselves. The entire market is up – thank you Mr. Bernanke – so clearly miners are going to be a part of the rise. But more than doubling the returns of the broad index is something worth getting excited about.
It’s much too early to call for the return of growth stocks, but at the very least, this is a pleasant surprise for investors who held onto these names, praying for a comeback.