In the latest sign of a market recovery, better-than-expected economic news from China, raised hopes on Monday that the worst of the global recession might be over. Brokerage CLSA said its China Purchasing Managers' Index (PMI), a measure of manufacturing activity, rose to a nine-month high in April to 50.1 from 44.8 - a level above 50 indicates expansion.On the news, the coal group trended higher, with companies such as Foundation Coal jumping over 11%. "Coal prices as a whole are due to rise because they have been beaten down so much over concerns over future demand, that everyone stands to gain from an uptick," said Mark Hansen, Director of Trading at CPM Group, during an interview on Squawk Box.
A separate report from Goldman Sachs released on Monday, showed that the investment firm raised its coverage view on coal companies to attractive from neutral. Goldman added Massey Energy to its conviction buy-list, lifting the rating on the stock to a buy from neutral. Shares of Massey Energy, a leading producer of Central Appalachian coal in the US, are up over 18% during today's trading session.
The news emerges as coal prices are down nearly 31% in 2009 alone, and about 54% from a year ago. If coal prices are due for a rebound, some of the companies that may see their shares gain from the news include:Page 1 of 3 | Next Page