BLBG: U.S. Futures, Asian Stocks Advance; European Shares Decline
U.S. stock futures and Asian shares rose, extending the MSCI World Index’s best monthly gain since 1989, on speculation government efforts to revive the economy are working. Europe’s Dow Jones Stoxx 600 Index retreated.
General Motors Corp., the biggest U.S. automaker, added 15 percent. Hynix Semiconductor Inc. soared 15 percent in Seoul after saying production cuts will lead chipmakers to a better second half this year. Hennes & Mauritz AB fell 5.8 percent as Europe’s second-largest clothing retailer posted its first quarterly profit drop in more than five years.
The MSCI World climbed 0.1 percent to 830.28 at 11:29 a.m. in London, extending its March gain to 11 percent. The index of 23 developed nations has trimmed a quarterly decline of as much as 25 percent to 9.8 percent as banks from Citigroup Inc. to Bank of America Corp. and JPMorgan Chase & Co. said they made money in the first two months of 2009 and U.S. Treasury Secretary Timothy Geithner unveiled plans to rid financial firms of toxic assets.
“These government efforts are certainly having an effect on sentiment on the equity markets and it’s always going to take months rather than weeks to turn around the supertanker that is the global economy,” said Andy Lynch, who helps manage about $7 billion as a fund manager at Schroder Investment Management Ltd. in London. “There’s a wealth of opportunity out there.”
Futures on the Standard & Poor’s 500 Index added 1.1 percent, indicating the gauge will extend its biggest monthly surge in 17 years. The S&P 500 yesterday climbed as unexpected growth in durable-goods orders and new-home sales boosted optimism that the economy is stabilizing.
‘Bottoming Process’
Treasuries declined as the U.S. prepared to sell $24 billion of seven-year notes. President Barack Obama’s government is selling record amounts of debt to revive economic growth, service deficits and cushion the failures in the financial system.
“No one can call a bottom but you can identify bottoming processes and we are clearly in that,” said Robert Doll, who oversees $280 billion as chief investment officer for global equities at BlackRock Inc. The Treasury plan “is not perfect and there are no silver bullets, but it is a step in the right direction,” he told Bloomberg Radio.
The MSCI Asia-Pacific Index rose 1.4 percent, led by Sony Corp. and Industrial & Commercial Bank of China Ltd. The gauge has rallied 21 percent from a five-year low on March 9.
Europe’s Stoxx 600 slipped 0.4 percent as U.K. retail sales posted the smallest annual gain in more than 13 years last month.
Bear-Market Rally?
This month’s advance in global equities won’t last, according to Nouriel Roubini, the New York University professor who predicted last year’s economic crisis.
“It’s more likely to be a bear-market rally like the five or six we have had for the last year and a half,” Roubini, a professor at NYU’s Stern School of Business and the chairman of consulting firm Roubini Global Economics, said in an interview with Bloomberg Television in London today.
Economists’ forecasts are “way too optimistic,” earnings will “surprise on the downside” and some large banks may go “belly up,” he said.
GM climbed 15 percent to $3.45 in pre-market trading in New York, indicating the automaker will extend its March advance of 33 percent. American International Group Inc., the insurer bailed out by the U.S. government four times since September, gained 5.8 percent to $1.27. AIG has surged 186 percent this month.
Hynix, Sony Gain
Hynix soared 15 percent to 11,700 won in Seoul after joining Powerchip Semiconductor Corp. in projecting the glut that drove memory chipmakers to post record losses will ease.
Sony, the world’s second-biggest maker of consumer electronics, climbed 7.4 percent to 2,215 yen.
ICBC, the world’s largest lender by market value, surged 13 percent to HK$4.05. Goldman Sachs Group Inc. committed to hold 80 percent of its almost 16.5 billion shares in ICBC until April 2010 under a new agreement, ICBC said yesterday.
Hennes & Mauritz fell 5.3 percent to 310.50 kronor. H&M, which sells $17 cardigans and $20 chinos, reported a drop in profit as a strengthening dollar hurt margins and the economic contraction deterred shoppers.
H&M’s results helped drag a gauge of European retailers down 1.3 percent. Kingfisher Plc, Europe’s largest home- improvement retailer, slid 3.3 percent to 137.6 pence after saying profit declined 23 percent on a writedown of the value of a Chinese unit and falling U.K. sales.
Munich Re, Bourbon
Munich Re added 2.5 percent to 98.15 euros. Goldman Sachs raised its recommendation on the shares to “buy” from “neutral” and added the shares to its “conviction buy” list.
Bourbon SA, owner of the world’s largest fleet of supply ships for deep-water oil exploration, rose 4.4 percent to 25.96 euros. The company reported 2008 net income of 224.4 million euros ($304.7 million) and said it’s on course to meet its 2012 targets. The company will pay a dividend of 90 euro cents a share and give one free share for every 10 held.
Man Group Plc surged 10 percent to 228.25 pence. The largest publicly traded hedge-fund manager said it will cut its workforce by about 15 percent after fiscal year profit dropped and assets under management declined by a third.
