ASX 200 mining stocks flying higher on 'most relaxed' Chinese stimulus ever

BHP, Fortescue and Rio Tinto shares could all benefit from China's new stimulus measures.

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S&P/ASX 200 Index (ASX: XJO) mining stocks are flying higher on Monday.

While the ASX 200 is up a very respectable 0.7% in early afternoon trade, Fortescue Metals Group Ltd (ASX: FMG) shares, BHP Group Ltd (ASX: BHP) shares and Rio Tinto Ltd (ASX: RIO) shares are all racing ahead of those gains.

Here's how the three ASX 200 mining stocks are faring at the time of writing:

  • The BHP share price is up 2.1% at $45.84
  • The Fortescue share price is up 1.8% at $27.43
  • The Rio Tinto share price is up 2.8% at $135.82

So, what's spurring ASX 200 investor interest on Monday?

I'm glad you asked!

ASX 200 mining stocks eyeing bazooka Chinese stimulus

Today's strong run for BHP, Fortescue, and Rio Tinto shares follow on some sizeable gains posted on Friday.

As we reported on the day, the ASX 200 mining stocks were catching tailwinds from the news that China's government was upping its stimulus measures to get the nation's struggling economy back onto its growth track.

Friday saw China kick off the sale of 1 trillion yuan (AU$210 billion) worth of ultra-long special sovereign bonds. Analysts expect a lot of that money will go to support China's struggling property markets and infrastructure sector, both of which are ravenous steel consumers.

And the core ingredient for steel, of course, is iron ore.

Copper prices also lifted on Friday. Today, iron ore and copper are up once more.

The iron ore price is up 0.8% to US$117.40 per tonne, while the copper price is up 2.4% to US$10,668. That sees the red metal, the second biggest revenue earner for the ASX 200 mining stocks, up a whopping 30% over the past 12 months.

Today the miners are continuing to enjoy a lift with due thanks to China.

That's because atop the $210 billion in bond sales, the People's Bank of China moved to eliminate minimum mortgage interest rates alongside lowering the minimum down payment ratio for buyers by 5%.

Commenting on the government's renewed efforts to boost the real estate sector, Chinese Vice-Premier He Lifeng said (quoted by The Australian Financial Review), "The property sector is related to the interest of the masses and the big issue of economic development."

Also likely spurring interest in the ASX 200 mining stocks are reports that China's central government will pressure local governments to purchase dwellings and transform these into lower cost housing.

"This is the most relaxed down payment policy ever in China. It signals the central government is really prioritising home buying demand," Yan Yuejin, research director at E-house China Research and Development Institute said.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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