BLBG: Oil Gains With Metals on China as S&P 500 Futures Drop
Oil rose for the first time in six days, metals advanced and South Africa’s rand led currencies of commodity-producing nations higher as Chinese industrial output expanded faster than estimated. U.S. equity-index futures fell while European stocks swung between gains and losses.
West Texas Intermediate crude climbed 0.5 percent to $103.93 a barrel at 8:08 a.m. in New York, paring gains of as much as 1.4 percent. Zinc, nickel and lead jumped at least 1.2 percent. The rand reached the strongest level this month against the dollar and Australia’s currency was poised for its biggest weekly gain since December 2011. Standard & Poor’s 500 Index (SPX) futures fell 0.2 percent while the Stoxx Europe 600 Index added 0.3 percent. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong advanced 1.2 percent.
Chinese factory production grew 9.7 percent in July from a year ago, government data showed today, compared with the 8.9 percent median estimate in a Bloomberg News survey of economists. The acceleration may bolster confidence that the nation will avoid a deeper economic slowdown after larger-than-forecast gains in exports and imports as well as improvement in gauges of manufacturing and service industries.
“Chinese data surprised to the upside this week which particularly benefitted industrial metals,” said Ole Hansen, the head of commodity strategy at Saxo Bank A/S in Copenhagen. There “could be a potential turnaround in expectations where the Chinese economy is heading over the coming months,” he said.
Copper climbed 0.6 percent, rising 3.1 percent this week, the best week in three months. All six of the main industrial metals on the LME rose, signaling a third day of gains for the LME metals index. China is the biggest buyer of industrial metals.
Commodity Currencies
South Africa’s currency advanced 1.1 percent to 9.7592 per dollar, extending this week’s gain to 0.8 percent. The Aussia rose 0.7 percent, advancing 2.9 percent on the week.
The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major counterparts, fell less than 0.1 percent. The gauge has declined 1.2 percent this week, the biggest drop since the period ended July 12. The yen strengthened 0.2 percent to 96.47 per dollar today.
Norway’s krone gained 1.2 percent against the euro, the most in four weeks, after a report showed inflation accelerated faster than economists estimated.
Three shares advanced for every two that declined in the Stoxx 600. The index is little changed this week. Royal KPN NV surged 16 percent in Amsterdam after billionaire Carlos Slim’s America Movil SAB said it plans to make a takeover offer for the Dutch phone company.
The volume of shares changing hands in Stoxx 600 companies was 14 percent greater than the 30-day average, according to data compiled by Bloomberg.
Extending Losses
The decline in S&P 500 futures signaled the U.S. gauge will extend this week’s 0.7 percent drop. Priceline.com Inc. (PCLN) climbed 5.7 percent in German trading as the largest U.S. online-travel agent by market value reported second-quarter sales that exceeded analysts’ estimates.
The MSCI Emerging Markets Index rose for a second day, adding 0.3 percent and trimming this week’s decline to 0.7 percent. The Shanghai Composite Index advanced 0.4 percent and Russia’s Micex Index added 0.5 percent. Exchanges in India, Malaysia, Indonesia, the Philippines, South Africa and Turkey were closed for holidays.
Junk-rated corporate bonds rose for a sixth week in Europe. High-yield bonds returned 0.2 percent, bringing the six-week gain to 2.1 percent. The securities lost an average 2.3 percent in June, according to Bloomberg bond index data.
To contact the reporters on this story: Richard Frost in Hong Kong at rfrost4@bloomberg.net; Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
