UK stocks : FTSE 100 closes up 1.2 pct at 3-wk highs
Miner Rio Tinto, the 10th-biggest stock in the FTSE 100, added 5.1 percent, after setting out clear plans for operational cost cuts and voicing guarded optimism on demand from key market China.
"It isn't just that they talked about cutting capex and operating costs and ... they have come up with some quite big numbers, but they have also emphasised that they are going to have a bit more of a focus on returning cash to shareholders," said Tom Gidley-Kitchin, analyst at Charles Stanley.
"What we are seeing is financial discipline and a supply response from the industry to more uncertain, lower growth in the short-term ... It is just one company, but I think that's why sentiment has improved and a lot of share prices are up."
The FTSE 350 mining sector added 3.1 percent, boosted by Rio but also taking heart from the growing optimism on the U.S. 'fiscal cliff'.
"There is a fog of uncertainty relating to fiscal cliff, euro zone prospects and - although this is less of a worry recently - the maintenance of Chinese growth," said Gidley-Kitchin.
"The mining companies acknowledge that, and so does everyone else. I think the right response in the short term is not to continue to go flat out, and to proceed with a certain amount of caution."
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