BLBG:Stocks Advance With Copper on China as Crude, Yen Drop
Stocks climbed around the world and copper rallied as manufacturing in China and Europe expanded and prospects of an imminent strike on Syria faded. The yen weakened, bonds declined and crude oil fell for a third day.
The MSCI All-Country Index added 0.6 percent to 366.16 at 10:35 a.m. in London. Standard & Poor’s 500 Index (SPA) futures advanced 0.9 percent. Copper jumped 1.8 percent and silver climbed 2.8 percent while West Texas Intermediate oil dropped 0.8 percent and U.S. natural gas rose to a five-week high. Japan’s currency tumbled at least 0.7 percent against all of its 16 major counterparts. The yield on 10-year U.K. gilts increased to a two-year high. The Jakarta Composite Index of equities slid 2.2 percent after the country’s trade gap widened to a record.
China’s economy is strengthening after a two-quarter slowdown, with a manufacturing gauge rising to a 16-month high in August. Euro-area factory output expanded at a faster pace than initially estimated in August and Spanish manufacturing gained for the first time since April 2011, according to data from Markit Economics. In the U.S., where markets are closed today, President Barack Obama delayed action against Syria by seeking approval from Congress.
“Growth expectations globally continue to improve,” Michael Kurtz, Hong Kong-based chief global equity strategist at Nomura Holdings Inc., Japan’s largest brokerage, said in an e-mail. “An ongoing rebalancing in China keeps growth there largely on a moderating trend.”
European Stocks
The Stoxx 600 jumped 1.6 percent, the most in eight weeks, as a gauge of commodity producers posted the biggest gain of the 19 industry groups on the equity benchmark. BHP Billiton Ltd. and Rio Tinto Group, the world’s two largest mining companies, climbed 2.6 percent and 3.9 percent, respectively.
Spain’s IBEX 35 Index rallied 1.6 percent. The measure of manufacturing activity for the country climbed to 51.1 in August from 49.8 in July.
Vodafone Group Plc (VOD) added 3.7 percent, heading for its highest close since 2001. Europe’s largest mobile-phone operator confirmed that it has held advanced talks with Verizon Communications Inc. about selling its 45 percent stake in their U.S. joint venture for $130 billion.
The MSCI Emerging Markets Index advanced 0.7 percent to a two-week high. Turkey’s benchmark equity gauge climbed 2.3 percent and the lira advanced 1 percent after the delay in U.S. action against neighboring Syria.
China Manufacturing
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong rose 2.3 percent, the most since Aug. 13. China’s Purchasing Managers’ Index was at 51.0, an official report showed yesterday. The median estimate in a Bloomberg survey was 50.6. A separate manufacturing PMI released today by HSBC Holdings Plc and Markit Economics rose to 50.1 last month from 47.7 in July, the biggest gain in three years and the first reading above 50 since April.
India’s rupee dropped 0.6 percent per dollar while the S&P BSE Sensex gained 1.5 percent. The nation’s economy grew 4.4 percent in the three months to June from a year earlier, the weakest pace since 2009, the government reported on Aug. 30.
Indonesian stocks fell for the first time in four days and the rupiah lost 0.5 percent. The trade gap in July reached $2.3 billion, the highest ever, according to the Statistics Bureau, and exceeding all 16 estimates in a Bloomberg News survey.
Won Gains
The won climbed 0.9 percent to the highest level in more than three months after South Korea reported a trade surplus that was double what economists predicted.
The yen fell 1.2 percent to 99.32 per dollar and reached 99.43, the weakest level since Aug. 2. Japan’s currency slid 1.1 percent to 131.26 per euro. The euro was little changed at $1.3216. The kiwi jumped 1.1 percent to 78.10 U.S. cents.
U.K. 10-year gilt yields climbed as much as nine basis points to 2.865 percent, the highest since Aug. 1, 2011. The pound strengthened to the highest level versus the euro in two months as a report showed U.K. house price growth quickened in August, adding to signs that the economy is recovering. Sterling appreciated 0.6 percent to 84.81 pence per euro after reaching 84.72 pence, the strongest level since June 26.
Germany’s 10-year bund yield rose six basis points to 1.92 percent and France’s increased three basis points to 2.51 percent.
The cost of insuring against losses on corporate debt fell to the lowest in a week, with the Markit iTraxx Europe index of credit-default swaps linked to 125 investment-grade companies dropping 2.5 basis points to 104.5 basis points.
Commodities Outperform
Copper advanced for the first time in five days and silver snapped a three-day slump. WTI fell to $106.82 a barrel and U.S. natural gas jumped as much as 3 percent to $3.689 per million British thermal units, the highest since July 25, on speculation warmer weather will boost demand for electricity to power air conditioners.
Commodities outperformed stocks and bonds last month. The S&P GSCI gauge of 24 raw materials rose 3.4 percent in August as U.S. crude reached a two-year high and gold rallied close to a bull market. The MSCI All-Country World Index of equities declined 2 percent including dividends and the BofA Merrill Lynch Global Broad Market Index of debt fell 0.352 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Richard Frost in Hong Kong at rfrost4@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
