BLBG:Stocks, Euro Climb On Spanish Bank Aid; Treasuries Slump
Stocks (MXWO) rose, with Spain’s banks climbing to a one-month high after the country sought a bailout for its lenders and China’s exports beat estimates. The euro strengthened and commodities gained.
The MSCI All-Country World Index added 0.7 percent at 7:50 a.m. in New York, and the MSCI Spain Financials Index jumped 3.8 percent. Standard & Poor’s 500 Index futures rose 0.3 percent after advancing as much as 1.5 percent. The euro appreciated 0.1 percent to $1.2532, paring gains of as much as 1.2 percent. The cost of insuring against a default by Spain fell three basis points. Oil advanced 0.9 percent and copper climbed 1.6 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. China’s exports grew last month at more than double the pace analysts estimated and crude oil imports rose to a record. Goldman Sachs Group Inc. said today it expects a 29 percent return for commodities over the next 12 months.
“The fact that we have some action is a positive,” Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a report. “The half-life of bailouts have got increasingly shorter over the last couple of years, so it will be interesting to see where the market is in subsequent days and weeks.”
Stocks and the euro pared gains after Italian and Spanish bond yields increased, reversing earlier declines.
Spanish Banks
The Stoxx Europe 600 Index climbed 1 percent, after increasing as much as 1.9 percent. Banco Santander SA jumped 1.3 percent, Bankinter SA rallied 2.9 percent and Banco Bilbao Vizcaya Argentaria SA added 2.1 percent. Telefonica SA (TEF) increased 1.1 percent after Spain’s biggest telecommunications company agreed to sell almost half its stake in China Unicom (Hong Kong) Ltd. for about 1.1 billion euros to reduce debt.
France’s CAC 40 Index added 1.2 percent as industrial production increased 1.5 percent in April. Economists had predicted a 0.1 percent decline.
The gain in U.S. futures indicated the S&P 500 will advance for a second day. The yield on 10-year Treasury notes added one basis point to 1.64 percent.
The Dollar Index slid 0.3 percent on reduced demand for haven assets. The yen weakened against 13 of its 16 major peers, slipping 0.1 percent per euro. Norway’s krone strengthened 0.4 percent versus the dollar as consumer prices rose more than estimated last month and oil prices rallied.
Spain’s two-year yield rose 23 basis points to 4.52 percent, after falling to as low as 3.94 percent, on concern investors holding the securities may rank behind official creditors in the queue for payment following the bailout. Credit-default swaps tied to the government’s debt slipped four basis points.
Default Risk
The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments dropped three basis points to 317.
Gains for raw materials on the S&P GSCI Enhanced Commodity Index will be led by a 41 percent jump in energy and 23 percent gain in industrial metals, Goldman Sachs said. Copper jumped today as much as 2.9 percent, the most since Feb. 3.
The MSCI Emerging Markets Index (MXEF) rose 1.4 percent. The Hang Seng China Enterprises Index (HSCEI) of mainland companies climbed 2.4 percent, the most in two months. Overseas shipments climbed 15.3 percent from a year earlier, exceeding all 29 estimates in a Bloomberg News survey. Benchmark gauges in South Korea, Taiwan, Thailand and Indonesia increased more than 1 percent.
India’s Sensex slipped 0.3 percent, reversing a 1.1 percent gain after S&P said the country may lose its investment-grade rating.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
