Credit Suisse was among the investment banks to push the natural...

Credit Suisse was among the investment banks to push the natural resources sector to clients this morning. "We are in the greatest commodity bull market of our generation and investors should be buying," it said. "Metal prices in our view will remain strong and equities are ready to go higher once the wounds have healed" from the "painful and unexpected" selloff of the past five days.

"Although the press would have us believe that commodities are a bubble led by hedge fund manipulation, the overall basket of metal and precious metals have held in remarkably well," it noted. "This could be a sign that prices are driven by genuine demand from consumers who are restocking their inventories due to strong order books."

Credit Suisse calculated that mining sector shares now stand at just 7.9 times current-year earnings, against a mid-cycle average of 12 times. "The market is implying commodity assumptions that are on average 41 per cent below spot prices, it concluded. "Either the metal markets are due a major correction, or the equity markets are missing a trick."

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