European stocks gained and copper rallied, leading a rebound in commodities, as leaders mulled the use of $1.3 trillion in funds to tame the region’s debt crisis before a summit this weekend. The Swiss franc strengthened to a two-week high against the euro.
The Stoxx Europe 600 Index climbed 0.7 percent, paring a weekly loss. Standard & Poor’s 500 Index futures added 0.2 percent, while Treasury 10-year yields slid three basis points to 2.16 percent. Copper jumped 3.4 percent after slumping 6.6 percent yesterday. The franc gained 0.8 percent to 1.2224 per euro, while India’s rupee losses in emerging-market currencies.
European Union leaders are accelerating talks on combining temporary and planned permanent rescue funds as of mid-2012, while scrapping a ceiling on bailout spending, two people familiar with the discussions said. A summit for Oct. 26 was added to the Oct. 23 meeting after German Chancellor Angela Merkel and French President Nicolas Sarkozy said they want euro- region leaders to agree on an “ambitious” plan.
“We’re going to get quite a lot of policy pronouncements trying to deal with the European crisis and the key critical piece that people are watching out for is how they’re going to leverage” the European Financial Stability Facility, Steve Brice, chief investment strategist at Standard Chartered Plc in Singapore, said in a Bloomberg Television interview. “Markets have pretty much discounted a poor outcome coming into this so the potential for a short-term rally or surprise on the upside is definitely there.”
LG Display, Microsoft
About five shares rose for every one that fell on the Stoxx 600, helping the gauge pare its weekly loss to 1.7 percent. The MSCI Asia Pacific Index climbed 0.1 percent, trimming its declines this week to 1.2 percent.
LG Display Co. surged 7.8 percent after analysts from LIG Investment & Securities Co. and Hyundai Securities Co. said losses will narrow in the current quarter. Hynix Semiconductor Inc. rallied 10 percent after research company HIS iSuppli said Apple Inc. used the company’s NAND-flash chips in the iPhone for the first time.
The S&P 500 rose 0.5 percent yesterday, recovering from earlier losses. Microsoft Corp. (MSFT) was little changed in extended trading after the world’s largest software maker reported first- quarter sales that topped analysts’ predictions. General Electric Co. and McDonalds’ Corp. are among companies scheduled to release their results today.
The euro dropped 0.4 percent to 105.42 yen, extending its weekly drop to 1.6 percent. The shared currency traded at $1.3742, down 0.3 percent. Merkel and Sarkozy agreed to ask euro-region leaders to assess a “comprehensive and ambitious” package of measures to address the debt crisis at a summit this weekend in order to agree on the plan at a second meeting by Oct. 26, said Steffen Seibert, a German government spokesman.
Europe’s Ratings
“There’s a lot of information and a lot of uncertainty whether this weekend’s meeting will come out with a definitive plan,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “The market is still very unsure and very uncertain.”
Standard & Poor’s said in a report today France is among euro-region sovereigns likely to be downgraded in a stressed economic scenario. The sovereign ratings of Spain, Italy, Ireland and Portugal would also be reduced by another one or two levels in either of New York-based S&P’s two stress scenarios, the ratings firm said.
Rupee, Ringgit
India’s rupee fell to 50.16 per dollar, weakening past 50 for the first time since 2009. South Korea’s won retreated 0.2 percent to 1,147.50 per dollar, bound for a second day of losses. The ringgit weakened 1.1 percent to 3.1578. Data today may show Malaysian consumer prices increased 3.3 percent in September from a year earlier, unchanged from the August pace, according to economists surveyed by Bloomberg.
The cost of protecting Asia-Pacific corporate and sovereign bonds from default fell, with the Markit iTraxx Australia index dropping four basis points to 186 basis points, according to Australia & New Zealand Banking Group Ltd. That’s the lowest level since Oct. 19, according to data provider CMA.
Three-month copper rallied 3.4 percent to $6,966.75 a metric ton on the London Metal Exchange, paring its weekly loss to 8 percent. Zinc, aluminum, tin and lead all advanced at least 2 percent. The London Metal Exchange Index of six primary metals sank 5.6 percent yesterday to the lowest level since July 2010.
Oil for December delivery rose 0.2 percent to $86.23 a barrel on the New York Mercantile Exchange. Front-month futures are down 0.5 percent this week and 5.4 percent lower this year. Brent’s premium narrowed as Libya’s state-run National Oil Corp. said Muammar Qaddafi’s death will help the return of crude output. Brent oil declined 0.2 percent to $109.60 a barrel.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
