June 10 (Bloomberg) -- Stocks rose around the world and U.S. futures gained, led by commodity producers as oil climbed to a seven-month high and copper and tin reached their best levels since October. The MSCI World Index of 23 developed countries added 1.3 percent at 12:17 p.m. in London as all 10 industry groups gained, while futures on the Standard & Poor’s 500 Index increased 1.5 percent. Crude oil rose as much as 2.3 percent to $71.65 a barrel in New York, while copper added as much as 1.8 percent to $5,264 a metric ton in London. The dollar and the yen weakened as investors sought higher-yielding currencies, while Treasuries fell for the fourth time in five days. Commodities surged as China’s government said property sales and investment are accelerating, adding to signs that the world’s third-largest economy is recovering. Consumer confidence in Australia jumped this month by the most in 22 years after the economy unexpectedly avoided a recession, while the American Petroleum Institute said oil supplies fell last week to their lowest level since March. “People are optimistic things are on a better footing on a global basis,” said Nigel Rendell, London-based senior emerging-market strategist at RBC Capital Markets. “A general decline in risk aversion is driving markets.” Stocks Rally Europe’s Dow Jones Stoxx 600 Index advanced 2.2 percent. The gauge has rebounded 36 percent since March 9 on speculation that the $12.8 trillion pledged by the U.S. government and the Federal Reserve will help end the first global recession since World War II. The index is now valued at 24.9 times the earnings of its companies, the most expensive level since 2004, weekly data compiled by Bloomberg show. A gauge of raw-material producers added 6.3 percent for the biggest advance among 19 industry groups in the Stoxx 600, while oil and gas companies increased 2.4 percent. BHP Billiton Ltd., the world’s biggest mining company, climbed 7 percent to 1,599 pence in London. Rio Tinto Group, the third-largest, increased 7.2 percent to 3,163 pence. Total SA, Europe’s third-largest oil company, climbed 2.4 percent to 42.30 euros. BP Plc added 2.6 percent to 543.25 pence. Alcoa Inc., the biggest U.S. aluminum producer, gained 1.8 percent to $11.35 in Germany, while ConocoPhillips, the second- largest U.S. oil refiner, added 2.2 percent to $46.53. Russia’s Micex Index advanced 2.9 percent on gains in OAO Rosneft, the nation’s biggest oil producer, and OAO GMK Norilsk Nickel, the largest mining company. The Dubai Financial Market General Index led an equity rally in the crude-producing Persian Gulf region, rising 3.6 percent. Bull Market China will continue to lead a global stock-market recovery after gains this year propelled it into a “bull market,” investor Mark Mobius said on Templeton Asset Management Ltd.’s Web site. “Commodity stocks look attractive because many of them have declined below their intrinsic value and we expect the global demand for commodities to continue its long-term growth,” Mobius said in the note. The Shanghai Composite Index advanced for a third day, rising 1 percent to the highest level since July 30. Property sales rose 45.3 percent to 1 trillion yuan ($146 billion) in the first five months of 2009 from a year earlier and real-estate investment growth quickened to 6.8 percent, the National Bureau of Statistics said on its Web site. Crude oil advanced for a second day on the New York Mercantile Exchange after the API said yesterday that oil supplies fell 5.96 million barrels to 357.9 million last week. Copper for delivery in three months gained for a second day on the London Metal Exchange. Tin, lead and zinc also rose to their highest since October as a decline in the dollar increased the appeal of metals as a currency hedge. Dollar, Yen Decline The dollar and the yen weakened against higher-yielding currencies including the New Zealand and Australian dollars as demand for riskier assets increased. The New Zealand dollar advanced 1.7 percent against the yen. The Aussie strengthened 1.2 percent versus the dollar and 1.9 percent against the yen. Treasuries fell, with the yield on the 10-year note rising four basis points to 3.90 percent. The yield on the Treasury maturing in 2011 added 1 basis point to 1.31 percent after jumping to an eight-month high at the end of last week as traders speculated the Federal Reserve will raise interest rates later this year as the recession eases. Minneapolis Fed Bank President Gary Stern said yesterday in an interview with PBS’s Nightly Business Report that he isn’t “terribly concerned” about inflation risks. Credit-Default Swaps The cost of protecting European corporate bonds in the credit-default swaps market declined. Contracts on the high- yield Markit iTraxx Crossover Index fell 15 basis points to 675, according to JPMorgan Chase & Co., signaling an improvement in perceptions of credit quality. The collapse of bonds tied to subprime mortgages froze credit markets starting in August 2007 as banks hoarded cash, triggering the global recession and losses at financial firms that have reached almost $1.5 trillion. Credit markets thawed as the U.S. Treasury said it would finance as much as $1 trillion in purchases of distressed assets, the Fed pledged to buy more than $1 trillion of bonds and the Federal Deposit Insurance Corp. agreed to guarantee corporate debt. The Libor-OIS spread, which measures banks’ reluctance to lend, has narrowed to 42 basis points, or 0.42 percentage point, from a record 364 basis points in October spurred by the failure of Lehman Brothers Holdings Inc. Obama, Mortgage Rates The U.S. Treasury yesterday approved 10 banks to buy back $68 billion of government shares, reducing officials’ authority to intervene in everything from lending and hiring strategies to compensation policies. President Barack Obama’s government is preparing to sell $19 billion of 10-year Treasury notes today and $11 billion of 30-year bonds tomorrow as part of efforts to end the worst U.S. recession in 50 years. The government may borrow $3.25 trillion in the fiscal year ending Sept. 30, according to Goldman Sachs Group Inc. in New York, one of 16 primary dealers required to bid at government auctions. Rising 10-year Treasury yields have pushed 30-year fixed mortgage rates up to 5.56 percent, the highest level this year, according to Bankrate.com in North Palm Beach, Florida. Latvia, Swedish Banks Latvia’s currency strengthened for a second day, rising 0.08 percent to 0.6981 against the euro after President Valdis Zatlers said the nation may receive part of an international loan by the end of June or early July if lawmakers pass budget cuts. Speculation the country may be forced to devalue the lats has receded since budget cuts were proposed. The Swedish krona rose for a second day against the euro as concern eased that a lats devaluation would spur losses at Swedish financial firms with loans to Latvia. Sweden’s four largest banks can handle loan losses in Estonia, Latvia and Lithuania of 150 billion kronor ($20 billion) over a three-year period, the Nordic country’s Financial Supervisory Authority said. Swedbank AB, the largest bank in the Baltics, climbed 6.9 percent to 41.70 kronor. SEB AB, the second-biggest, added 5.8 percent to 34.50 kronor. Together, the two Stockholm-based banks have lent more than 366 billion kronor in the region. Fiat SpA increased 4.9 percent to 7.79 euros. The Turin, Italy-based automaker said a U.S. Supreme Court ruling cleared the way for the purchase of most of Chrysler LLC’s assets and the transaction will close “shortly.” Fiat, Ford The combined automakers would have sales of 4.5 million vehicles globally based on 2008 results, placing them just behind Dearborn, Michigan-based Ford Motor Co. as the sixth- largest. Fiat Chief Executive Officer Sergio Marchionne has said he expects only six global producers to survive the recession. Home Depot Inc. added 3.5 percent to $25.20 in pre-market New York trading. The world’s largest home-improvement retailer said it expects 2009 adjusted profit from continuing operations to decline 20 to 26 percent, a smaller decrease than the Atlanta-based company had projected. Investors predict the S&P 500 will fall from its highest level in seven months on concern the government’s economic rescue efforts may spur inflation and drive up interest rates, a survey of Bloomberg users showed. After optimism about the U.S. stock index rose to a record in May, the monthly Bloomberg Professional Global Confidence Survey’s measure dropped 10 percent to 46.26 this month, below the threshold of 50 that divides sentiment between expectations for equity prices rising and falling in the next six months.

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