BLBG: European Stocks Rise, Led by BP; U.S. Futures Gain, Oil Falls
By Stephen Kirkland
June 11 (Bloomberg) -- European stocks rose for a third day as BP Plc rebounded, and Asian shares gained. U.S. index futures advanced, indicating the Standard & Poor’s 500 Index may extend yesterday’s rally. Crude oil declined.
The Stoxx Europe 600 Index climbed 0.8 percent at 10:23 a.m. in London, while the MSCI Asia Pacific Index jumped 1.2 percent. Futures on the Standard & Poor’s 500 Index advanced 0.3 percent. BP increased 5.5 percent, its first gain in five days. Oil fell 0.8 percent, snapping a three-day gain.
The 8.4 percent drop in the Stoxx Europe index from an April 15 high left its companies trading near the cheapest levels relative to earnings since January 2009. China reported increases today in industrial production and consumer spending, reassuring investors that the world economic recovery is sustainable. Retail-sales growth in the U.S. probably slowed, economists said before a government report.
“Overall, the signs are encouraging,” said Tim Schroeders, who helps manage about $1.1 billion at Pengana Capital Ltd. in Melbourne. “Investors generally are prepared to take more risk today.”
The gains in European equities were led by oil and gas companies and banks. Spain’s IBEX 35 rallied 1.8 percent, the biggest increase among 18 western European benchmark indexes.
BP Rebound
BP snapped five days of losses that sent the stock to a 13- year low. Chairman Carl-Henric Svanberg is being summoned to Washington for a meeting with President Barack Obama as politicians step up pressure on the company to settle damage claims from the Gulf of Mexico leak and suspend the dividend.
The cost of insuring BP’s bonds using credit-default swaps fell from a record level, with contracts declining 34.5 basis points to 443.5, according to CMA Datavision. BP’s $3 billion of 5.25 percent notes due in 2013 rose 3.125 cents to 95.375 cents on the dollar yesterday, after falling to as little as 89.94 cents June 9. The yield slipped to 6.8 percent, a premium of 534 basis points over similar-maturity Treasuries, down from 655.
Banco Santander SA, Spain’s biggest lender, rose 3.4 percent in Madrid after predicting a “brilliant” outlook for earnings. Caja Madrid and Bancaja began a merger process that would create Spain’s biggest savings bank amid government efforts to shore up the financial system. Credit-default swaps on Santander dropped 18.5 basis points to 195.5 and those on Banco Bilbao Vizcaya Argentaria SA declined 24 to 362.
Novartis Gains
Novartis AG rallied 3.2 percent in Zurich after the drugmaker won a U.S. advisory panel’s backing to introduce the first pill to treat multiple sclerosis.
Asian stocks rose for a second day as Japan’s Nikkei 225 Stock Average climbed 1.7 percent. Canon Inc., which receives 31 percent of its sales from Europe, gained 1.9 percent in Tokyo. Samsung Electronics Co. increased 3.1 percent in Seoul after an industry group forecast chip sales to rise.
U.S. futures advanced after the 3 percent gain in the S&P 500 yesterday. The yield on the 10-year Treasury note fell three basis points to 3.29 percent.
Sales at U.S. retailers may have increased 0.2 percent in May, the slowest pace of the year, following a 0.4 percent April gain, according to the median economists’ estimate before the Commerce Department report at 8:30 a.m. in Washington.
Another economic report today may show the European debt crisis so far has had little effect on consumer confidence. The ThomsonReuters/University of Michigan preliminary sentiment index for June increased to 74.5 from 73.6 at the end of last month, according to the median estimate of economists.
Emerging Markets
Developing-nation stocks rose, sending the MSCI Emerging Markets Index up 1.1 percent to a one-week high. Benchmark indexes in South Korea, Taiwan, the Philippines and Indonesia rallied more than 1 percent.
The euro was little changed after rising earlier today to $1.2148, the highest level since June 4. The currency was trading at 110.79 yen, on course to snap a six-week decline. The dollar rose 0.3 percent to 91.57 yen.
Crude oil for July delivery fell to $74.86 a barrel in electronic trading on the New York Mercantile Exchange. Copper gained 0.3 percent to $6,430 a metric ton on the London Metal Exchange, the fourth consecutive increase, and gold was 0.3 percent higher at $1,220.35 an ounce.
To contact the reporter for this story: Stephen Kirkland at skirkland@bloomberg.net
