BLBG:Euro, Asia Shares Climb On Spain Bank Bailout; Oil Gains
Asian stocks rose the most in almost four months, the euro reached a two-week high and oil gained after Spain sought a bailout for its banks and China’s exports beat estimates. Treasuries fell.
The MSCI Asia Pacific Index climbed 1.8 percent as of 12:50 p.m. in Tokyo. Futures on the Standard & Poor’s 500 Index increased 1.1 percent. The euro strengthened 0.9 percent to $1.2628. The 10-year U.S. Treasury yield rose seven basis points to 1.7 percent, while credit-default swaps on Asian bonds dropped. Oil for July delivery jumped as much as 3 percent in New York. Copper futures added 2.5 percent.
Spain asked euro-region governments over the weekend for as much as 100 billion euros ($126 billion) to help shore up its banking system, a sign Europe is tackling a crisis that has roiled markets around the world. Chinese data showed exports grew last month at more than double the pace analysts estimated and crude oil imports rose to a record.
“The bailout will keep companies that borrow from Spanish banks from going down all together,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $70 billion. “In China, overseas demand is stronger than expected.”
The MSCI Asia Pacific Index, which gained for the first time in six weeks in the previous five days, has tumbled 12 percent from this year’s high on Feb. 29. Canon Inc., a camera maker that depends on Europe for almost a third of its sales, rose 2.7 percent in Tokyo. Samsung Electronics Co., which counts China as its biggest market, gained 1.9 percent in Seoul.
Hong Kong Stocks
The Hang Seng China Enterprises Index of mainland stocks listed in Hong gained 2.1 percent, climbing the most among Asia’s major indexes, led by lenders and energy companies. Bank of China Ltd. advanced 2.2 percent. China Petroleum & Chemical Corp., the mainland’s biggest refiner, added 2.4 percent.
China’s overseas shipments climbed 15.3 percent in May from a year earlier, the customs bureau said, exceeding all 29 estimates in a Bloomberg News survey. Imports rose 12.7 percent, more than twice the median forecast for a 5.5 percent gain.
“This shows it’s not all doom and gloom,” said Song Seng Wun, an economist with CIMB Research Pte. in Singapore. “Growth momentum may be slowing, but it’s not about to crash.”
The euro strengthened to as much as $1.2671, the highest since May 23. The European currency has fallen 3.5 percent in the past six months, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation- Weighted Indexes.
‘Willing to Act’
“Markets were wondering whether Spain was going to drag on for another month or two,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. (WBC), Australia’s second-largest lender. The Spanish bailout “is evidence that policy makers are willing to act,” he said.
Asian currencies advanced, with the Malaysian ringgit climbing 0.8 percent to 3.16 per dollar and South Korea’s won advancing 0.7 percent to 1.176.4 against the greenback.
Yields on 10-year Treasuries touched a more than one-week high as demand for safer government debt eased. Treasuries have gained 3 percent this quarter through June 8, based on Bank of America Merrill Lynch data. The yield on South Korean five-year bonds climbed six basis points, or 0.06 percentage point, to 3.4 percent.
The cost of insuring bonds from default fell, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan dropped 10 basis points to 187 basis points, Royal Bank of Scotland Group Plc prices show. The gauge is on course for its biggest daily decline since Nov. 30, according to data provider CMA.
Oil climbed after data from the Beijing-based General Administration of Customs showed that China, the world’s second- biggest oil consumer, increased crude imports to a record in May as refineries raised processing rates. Copper advanced the most in more than four months after Chinese imports of the metal surged 12 percent.
To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
