BLBG:Europe Stocks Gain With Commodities as Yen Hits 2009 Low
European stocks rose after posting the biggest weekly drop since November and commodities rebounded. The yen weakened through 99 per dollar for the first time since May 2009 after the Bank of Japan (8301)’s unprecedented stimulus measures last week.
The Stoxx Europe 600 Index gained 0.4 percent at 6:05 a.m. in New York after sliding 2.3 percent last week. Standard & Poor’s 500 Index futures added 0.3 percent. The Nikkei 225 Stock Average jumped to a 4 1/2-year high and Japan’s currency sank 1.1 percent to 98.68 per dollar after touching 99.01. South Korea’s won slid to the weakest level in more than eight months. Spanish note yields fell below 2 percent for the first time since 2010 and Italian bonds rose for a sixth day. The S&P GSCI gauge of 24 commodities jumped 0.7 percent, as copper climbed 1 percent and natural gas advanced 0.9 percent.
Industrial production in Germany rebounded in February, the Economy Ministry said today, after reports last week indicated euro-area services output contracted more than initially estimated and retail sales dropped. Alcoa Inc. (AA) is scheduled to kick off the first-quarter earnings-reporting season in the U.S. The yen has declined 5.9 percent and the Nikkei 225 has risen 6.7 percent since the Bank of Japan said April 4 it would double bond buying to reach its target of 2 percent annual inflation within two years.
“I am still bullish,” said Kevin Lilley, a fund manager at Old Mutual Asset Managers U.K. in London, which oversees about 4 billion pounds ($6.2 billion). “With the economic data that has been weaker, I will need to moderate that view a little bit, but I still think it’s right to have a cyclically-biased portfolio.”
Greek Merger
More than four shares gained for each one that fell in the Stoxx 600. (SXXP) Healthcare and food companies contributed the most to the index’s advance, with Novartis AG climbing 1.7 percent and Nestle SA rising 0.9 percent.
National Bank of Greece SA and Eurobank Ergasias SA both plunged 30 percent in Athens trading, the maximum permitted move, as their merger was put on hold while they raise funds to avoid nationalization.
Credit-default swaps on European bank debt fell for a fifth day with the Markit iTraxx Financial index of 25 banks and insurers dropping six basis points to 169.5, the lowest since March 21.
The gain in S&P 500 futures indicated the U.S. gauge will rebound from last week’s 1 percent drop. Alcoa advanced 1.5 percent in German trading before reporting earnings. Income at S&P 500 companies decreased 1.8 percent in the first three months of the year, according to analyst estimates compiled by Bloomberg. That would mark the first year-over-year decrease in profit since 2009.
Yen Slides
The yen dropped at least 0.5 percent against all of its 16 major peers, falling most against the South African rand and Swedish krona. It weakened 1.5 percent to 128.71 per euro, while the 17-nation shared currency strengthened 0.2 percent to $1.3017.
The yield on Spain’s two-year notes declined three basis points to 2.02 percent, after dropping earlier today to 1.97 percent, the least since Oct. 26, 2010. Italy’s two-year rates fell four basis points to 1.45 percent.
France’s 10-year yield fell to a record-low 1.709 percent and Austria’s declined to 1.46 percent. Belgium’s 10-year borrowing costs declined to 1.92 percent, also an all-time low.
Portugal Risk
The cost of insuring against losses on Portugal’s sovereign debt with credit-default swaps increased 33 basis points to 429, the highest since Jan. 2. The PSI-20 Index of stocks fell 0.4 percent as Banco Espirito Santo SA and Banco Comercial Portugues SA declined at least 1.2 percent in Lisbon trading.
The country’s Constitutional Court blocked a plan to suspend some payments to state workers and pensioners, leaving the government needing to find more spending cuts to meet the terms of the country’s international bailout.
The MSCI Emerging Markets Index (MXEF) slid 0.1 percent, extending the biggest weekly drop since May. The Shanghai Composite Index lost 0.6 percent and Taiwan’s Taiex Index tumbled 2.4 percent, the most in 10 months, as China reported more infections from a deadly bird influenza and trading resumed after four-day weekend. South Korea’s Kospi sank 0.4 percent and the won slid 0.8 percent as the risk of conflict with North Korea spurred capital outflows.
The S&P GSCI climbed for the first time in seven days. Copper advanced after miners in Chile, the world’s biggest producer, said they will announce a nationwide strike today. Natural gas climbed as much as 1.3 percent to the highest price since August 2011. Wheat jumped 0.7 percent after China said it purchased almost 1 million metric tons of U.S. grain.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net;
