BLBG:Europe Futures, Metals Gain On Stimulus Signs; Euro Drops
European stocks rose the most in four weeks and commodities advanced on speculation regional leaders will join China in stepping up efforts to bolster economic growth. The euro weakened.
The Stoxx Europe 600 Index (SXXP) climbed 0.9 percent as of 8:17 a.m. in London. Standard & Poor’s 500 Index futures gained 0.2 percent after the benchmark added 1.6 percent yesterday. The MSCI Asia Pacific Index rallied 1.4 percent, its best performance since March. The S&P GSCI Index of 24 commodities rose 0.2 percent, with copper gaining 0.7 percent. Italian and Spanish 10-year government bond yields declined.
European leaders will do “everything necessary” to keep Greece in the 17-nation euro and focus on steps to aid economic expansion, German Finance Minister Wolfgang Schaeuble said yesterday. China plans to speed up approval of infrastructure projects and allocate construction funding faster to improve growth, the China Securities Journal reported.
“Markets have room to rebound,” said Mikio Kumada, a global strategist in Singapore at LGT Capital Management, which manages more than $20 billion globally. “Even if Greece exits, Europe will go to great lengths to ensure this is done in the least painful way. A compromise by the euro zone leaders would reinforce such hopes.”
European leaders are scheduled to meet in Brussels tomorrow. German Chancellor Angela Merkel said she won’t shy away from disagreeing with French President Francois Hollande, saying good cooperation “doesn’t exclude differing positions.” France isn’t out to create conflict and will welcome “all the tools, all the proposals” at the meeting, Hollande said.
‘Prudent’ Policy
Italian government bonds rose, pushing the 10-year yield down by eight basis points, or 0.08 percentage point, to 5.72 percent. In Spain, the 10-year yield dropped five basis points to 6.23 percent.
Four stocks rose for each one that dropped in the MSCI Asia Pacific Index. (MXAP) A gauge of industrial companies led gains among 10 groups, advancing 1.9 percent. The Hang Seng China Enterprises rallied 1.8 percent, the most in five weeks, and the Nikkei 225 Stock Average gained 1.1 percent.
Fanuc Corp., a Japanese industrial robot maker, jumped 3.7 percent in Tokyo. South Korea’s LG Electronics Inc. (066570), the world’s second-largest television maker, surged 7.6 percent. Anhui Conch Cement Co., a Chinese producer of the building material, rose 4.4 percent in Hong Kong.
China Stimulus
The China Securities Journal report follows a pledge by Premier Wen Jiabao to adopt a “proactive fiscal policy and a prudent monetary policy” to shore up the world’s second-largest economy. A leading index for China rose 0.8 percent in April, the same pace as the prior month, the New York-based Conference Board said in a statement today.
“Markets are trading on hopes for improvement on both fronts,” said Dariusz Kowalczyk, a strategist in Hong Kong at Credit Agricole CIB. “Concrete evidence of things moving in the right direction will be needed to maintain the gains.”
GrainCorp Ltd. (GNC), an Australian grain handler, rallied 8.6 percent in Sydney trading after raising its profit forecast to a record. Japan’s Tokyo Tatemono Co. added 3.3 percent after Nomura Securities Co. lifted its rating on the developer to “buy” from “neutral.”
Metals advanced on optimism demand in China will increase. Copper traded at $7,787.50 a metric ton in London, up 0.7 percent. Lead added 0.6 percent. Crude for June delivery, which expires today, gained 0.3 percent to $92.86 a barrel in New York.
“Stimulus measures can have significant implications in terms of demand prospects,” Yang Xiaoguang, an analyst at Jinrui Futures Co., said by phone from Shenzhen. “We expect the Chinese economy to bottom in the second quarter, and rebound later this year.”
Trade Data
The euro fell 0.1 percent to $1.2801 as the debt crisis sapped confidence in the region. An index of household sentiment probably fell to minus 20.5 this month from minus 19.9 in April, the lowest since January, according to the median estimate in a Bloomberg News survey before the European Commission reports the figure today.
The yen dropped 0.2 percent to 79.45 per dollar amid speculation policy makers will boost stimulus measures to support growth. Demand for the currency was limited before data tomorrow that may show Japan posted a second-straight trade deficit in April of 470.8 billion yen ($5.9 billion), a separate Bloomberg survey showed.
“As long as deflation continues, pressure on the BOJ to expand monetary easing won’t end,” said Daisaku Ueno, a senior currency and fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo.
To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
