BLBG: European Stocks, Metals Climb as Euro Strengthens
European stocks rose for a fourth day and metals gained on signs China’s manufacturing is rebounding. The euro strengthened and Greek bonds rose for a 10th day as the region’s leaders prepared to hold budget talks.
The Stoxx Europe 600 Index (SHCOMP) climbed 0.5 percent as of 8:09 a.m. in New York. Futures on the Standard & Poor’s 500 Index added 0.3 percent in the U.S., where markets were closed today for the Thanksgiving holiday. The euro appreciated against 13 of its 16 major counterparts. Israel’s shekel reached the highest level in almost one month and the benchmark stock index advanced on a cease-fire agreement. Copper gained 0.6 percent.
A survey signaling the first expansion in China’s factory output in 13 months boosted optimism that growth in the world’s second-largest economy is recovering after a seven-quarter slowdown. Leaders of the 27 European Union nations gather for budget negotiations in Brussels today and euro-area finance ministers will hold a meeting on Nov. 26 to discuss Greek aid. Israel and the Palestinian Islamist group Hamas agreed to a truce, halting eight days of aerial assaults.
“Chinese activity has been picking up since September and it’s an indication that the economy has stabilized,” Gopal Agrawal, who helps oversee $1 billion as chief investment officer of Mirae Asset Global Investments (India) Pvt., said by phone today from Mumbai. “The truce between Israel and Hamas is sentimentally positive as it may help stabilize oil prices.”
Stocks Rally
The Stoxx 600 climbed to a two-week high as all but one of 19 industry groups advanced. SABMiller Plc (SAB) rallied 5.9 percent, the most in more than a year, after the world’s second-biggest brewer said first-half earnings rose 17 percent as gains in Latin America and Africa offset European declines. Daily Mail and General Trust Plc, publisher of Britain’s Daily Mail newspaper, surged as much as 13 percent, the biggest advance in three years, as full-year operating profit increased.
Glencore International Plc (GLEN) gained 2.3 percent as the European Commission approved its $32 billion takeover of Xstrata Plc. Competition Commissioner Joaquin Almunia said Glencore’s offer to stop buying zinc from Nyrstar NV ensured that the market for the metal would remain competitive. Xstrata advanced 2.4 percent.
The MSCI Emerging Markets Index rose 0.5 percent, gaining for a fourth day, the longest winning streak since Nov. 2. Fifty-day volatility on the gauge fell to the lowest since 2004.
Industrial Metals
The preliminary reading of a Chinese purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics was 50.4 for November. It compares with a final level of 49.5 for October. A reading above 50 indicates expansion. A recovery in manufacturing would bolster prospects for a pickup in economic growth that slowed last quarter to the weakest pace in more than three years.
Copper for delivery in three months rose to $7,735 a metric ton on the London Metal Exchange. All six main industrial metals traded on the bourse advanced, with tin gaining 0.4 percent and nickel up 0.2 percent.
The Nikkei 225 Stock Average (NKY) rallied 1.6 percent to a six- month high as a depreciating yen boosted the earnings outlook for exporters. The Japanese currency retreated versus 15 of its 16 major peers, reaching 82.84 per dollar, the weakest level since April 4.
Greek Bonds
The euro rose 0.5 percent to $1.2892 after touching $1.2899 earlier today, the highest level since Nov. 2. It strengthened 0.5 percent to 106.43 yen.
European political leaders, already sparring over Greece, the fate of the euro, banking union and EU expansion, need to reach agreement on a proposed 1.033 trillion-euro package for the years 2014-2020.
Greece’s 10-year bond yield fell as much as 65 basis points to 16.1 percent, the lowest since the nation’s debt was restructured in March. Spain’s 10-year yield dropped four basis points to 5.67 percent as the nation sold 3.88 billion euros of bonds at an auction, beating its 3.5 billion-euro target.
The cost of credit-default swaps insuring Portuguese sovereign debt fell for a fourth day, dropping 13 basis points to 512. The contracts tumbled 20 percent this week from 641 basis points on Nov. 16.
Swaps insuring corporate debt also fell for a fourth day, with the Markit iTraxx Europe index (MXEF) of derivatives linked to 125 investment grade companies declining 3 basis points to 123, the lowest in a month.
Israel’s shekel strengthened 0.7 percent to 3.8689 versus the dollar, and the benchmark stock index rose 0.6 percent. Israel and the Palestinian militant group agreed to end more than a week of air strikes and missile attacks, after talks brokered by Egypt’s Islamist leaders and the U.S.
Oil futures were little changed at $87.39 a barrel. Crude inventories in the U.S. dropped by 1.47 million barrels last week, the Energy Department said yesterday. Supplies were forecast to increase by 1 million barrels, according to a Bloomberg survey of analysts.
To contact the reporters on this story: Richard Frost in Hong Kong at rfrost4@bloomberg.net; Paul Dobson in London at pdobson2@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
