Stocks (MXAP) rose and copper climbed to the highest in almost four months after China’s economic growth slowed, bolstering speculation monetary policy will ease. The dollar and the yen weakened, while the cost of insuring European corporate bonds fell.
The MSCI All-Country World Index (MXWD) added 1 percent at 9:55 a.m. in London, with China’s Shanghai Composite Index jumping 4.2 percent. Standard & Poor’s 500 Index futures advanced 0.8 percent. Copper rallied as much as 3.3 percent. The dollar depreciated against 15 of its 16 major counterparts, losing 1.2 percent versus South Africa’s rand. Spain’s two-year note yield fell 11 basis points after a bill sale. The Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade rated companies sank 3.25 basis points to the lowest since Oct. 31.
Gross domestic product in China, the world’s second-largest economy, grew 8.9 percent in the fourth quarter, the statistics bureau said in Beijing. While the economy expanded at the slowest pace in 10 quarters, growth beat the 8.7 percent estimate by economists in a Bloomberg survey. Spain sold 4.88 billion euros ($6.2 billion) of bills, compared with the maximum 5 billion euros targeted, its first offering since S&P cut its credit rating by two steps last week.
“There’s a bias in China right now for more policy easing,” said Andrew Pease, Sydney-based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages $150 billion. “We are hearing China’s senior leadership is very, very concerned about the outlook in Europe.”
European Stocks
The Stoxx Europe 600 Index rose 1.2 percent to its highest level since Aug. 2, led by banks, carmakers, mining and oil companies. Eight stocks advanced for every one that retreated.
Afren Plc climbed 9.3 percent, the biggest gain in the index, after saying that it has discovered oil and gas off the coast of Nigeria. Rio Tinto Group advanced 1.3 percent after the world’s third-largest mining company said its fourth-quarter iron-ore production rose to a record.
The gain in U.S. futures indicated the S&P 500 will advance as trading resumes following the Martin Luther King holiday yesterday. A report today may show that a measure of manufacturing in the New York region climbed to 11 in January from 9.5 in December, according to the median forecast of 50 economists surveyed by Bloomberg News.
Well Fargo, Citigroup
Wells Fargo & Co. and Citigroup Inc. are among companies scheduled to report earnings today. S&P 500 companies, which beat profit estimates in the previous 11 quarters, probably will report a 4.6 percent increase in per-share earnings during the September-December period, according to analysts’ estimates compiled by Bloomberg.
The yield on Spanish 10-year bonds dropped nine basis points to 5.10 percent. Italian bonds rose for a second day, sending the 10-year yield down 13 basis points to 6.49 percent. German bunds weakened, with the 10-year yield rising two basis points to 1.79 percent. U.S. 10-year Treasury yields climbed one basis point to 1.88 percent.
The Dollar Index (DXY) declined 0.6 percent and the yen slipped against 14 of its 16 major peers. The euro jumped 0.8 percent to $1.2766 and 0.6 percent to 97.81 yen, snapping a two-day decline.
Copper futures in New York climbed to $3.7565 a pound, the highest price since Sept. 21. The S&P GSCI gauge of 24 commodities gained as much as 1.7 percent, the most since Jan. 3. West Texas Intermediate oil rose 1.9 percent to $100.53 a barrel. Natural gas fell as much as 5.1 percent from its Jan. 13 close to $2.533 per million British thermal units, the lowest since September 2009.
The MSCI Emerging Markets Index rose 2 percent, the most in two weeks on a closing basis. Benchmark gauges in Russia, India, Poland and Turkey climbed more than 1.7 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
