BLBG: Stocks Advance in Europe, Asia as Copper Rises on China
Stocks gained in Europe and Asia while copper advanced as manufacturing in China expanded at the fastest pace in five months. The euro weakened after European industrial growth slowed.
The Stoxx Europe 600 Index climbed 0.3 percent at 7:31 a.m. in New York as the MSCI Asia Pacific Index added 0.5 percent. Standard & Poor’s 500 Index futures advanced less than 0.1 percent. Copper rallied 1.2 percent while the euro depreciated against seven of its 16 major counterparts.
Growth in Chinese manufacturing added to evidence that the government’s measures to counter the slowdown in the world’s second-biggest economy are gaining traction. A report showed factory output slowed more than initially estimated last month in the 18-nation euro currency region. Economists forecast the European Central Bank will cut the deposit rate to less than zero when policy makers meet on June 5.
“With European companies’ big exposure to the Chinese market, investors are carefully watching the data out of China,” said Kai Fachinger, a fund manager at RobecoSAM AG in Zurich, which manages 3 billion euros ($4.1 billion). “Improving macro-economic data is supporting sentiment as investors wait to see what the ECB will do this week.”
China’s Purchasing Managers’ Index rose to 50.8 in May, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing, compared with the 50.7 median estimate of analysts surveyed by Bloomberg News. April’s reading was 50.4, with numbers above 50 indicating expansion.
Norwegian Business
The Stoxx 600 advanced after a seventh consecutive weekly gain, the longest streak since August 2012. The gauge increased 1.9 percent in May, a second monthly advance.
Det Norske Oljeselskap ASA rallied 5.2 percent after agreeing to buy Marathon Oil Corp.’s Norwegian business for $2.7 billion. Orion Oyj jumped 15 percent after saying it will develop a cancer treatment with Bayer AG. Air France-KLM Group (AF) added 2.4 percent after a report that the airline will start a 1 billion-euro cost-cutting program in 2015.
Alcatel-Lucent SA dropped 1.6 percent after the French network-equipment maker said it is offering 1 billion euros in bonds that can be exchanged for stock.
The MSCI All-Country World Index rose 0.1 percent following last month’s 1.8 percent increase. The MSCI AC Asia Pacific Index (MXAP) gained 3.2 percent last month, the most since September. Equity markets in China, Hong Kong and New Zealand were closed today for holidays. The value of global shares rose to a record $64 trillion last week.
Euro Manufacturing
Copper climbed to $6,926 a metric ton and West Texas Intermediate Crude rose to $102.87 a barrel. China is the biggest energy consumer and largest buyer of industrial metals. A gauge of Stoxx 600 miners climbed the most among 19 industry groups, with Rio Tinto Group gaining 1.8 percent and Anglo American Plc adding 1.6 percent.
The euro dropped toward its lowest level in three months versus the dollar. The greenback gained 0.2 percent to $1.3613 per euro after appreciating to $1.3586 on May 29, the strongest since Feb. 13. The euro was little changed at 138.89 yen.
Manufacturing in the euro area slowed amid weakness in France, adding to evidence of the region’s uneven recovery. A Purchasing Managers’ Index fell to 52.2 last month from 53.4, below a May 22 preliminary reading of 52.5, London-based Markit Economics said today. Growth in new orders eased, according to the report.
Australia’s dollar weakened after RPData-Rismark data showed median home prices for the nation’s biggest cities dropped 1.9 percent in May, the biggest decline since the 2008 financial crisis. Building approvals slid 5.6 percent in April, the statistics bureau said.
Irish Bonds
The Aussie fell 0.6 percent to 92.52 U.S. cents, set for the biggest drop in almost two weeks. It weakened 0.4 percent to 94.396 yen.
Ireland’s 10-year bond yield declined four basis points to a record 2.551 percent. German government bonds rose, pushing two-year yields to the lowest in more than a year, as data showing slower inflation and manufacturing growth boosted the case for stimulus.
Portugal’s bonds slid after its Constitutional Court ruled that austerity measures including further wage cuts for state workers violated equality principles. The yield on Portuguese 10-year bonds increased four basis points to 3.637 percent.
Treasury 10-year note yields rose one basis point to 2.486 percent.
World Cup
Qatar’s QE Index, which traded for the first time in the emerging-market measure, sank 1.1 percent on bets the nation may lose the right to host the 2022 World Cup.
Russia’s Micex Index (INDEXCF) jumped 2.3 percent. Ukraine made its first payment in months to OAO Gazprom and the nation is set to resume talks with Russia on a deal to keep natural gas flowing between the countries. Gazprom climbed 2.4 percent. The Ukrainian Equities Index (UX) advanced 1 percent. The ruble was little changed at 34.8883 versus the dollar and gained 0.2 percent to 47.4982 to the euro.
The S&P BSE Sensex rose 1.9 percent, set for the biggest gain since May 12. India’s Purchasing Managers’ Index climbed to 51.4 in May, the highest reading since February, data released by HSBC Holdings Plc and Markit Economics showed.
Thailand’s SET Index (SET) advanced 1.8 percent for its highest close since October. The junta will accelerate spending on infrastructure and promote investment along its borders, Chief Marshal Prajin Juntong, the head of economic affairs, told reporters yesterday.
To contact the reporter on this story: James Herron in London at jherron9@bloomberg.net
To contact the editors responsible for this story: Stuart Wallace at swallace6@bloomberg.net Justin Carrigan
