BLBG:Stocks Rise, Euro Strengthens Before European Summit; Copper, Oil Advance
Stocks rose, with Europe’s benchmark index climbing to a five-week high, and the euro gained on speculation the region’s leaders will agree on steps to ease the debt crisis at a summit tomorrow. Copper and oil advanced.
The Stoxx Europe 600 Index jumped 1 percent at 9 a.m. in London. Standard & Poor’s 500 Index futures increased 0.9 percent. The euro strengthened 0.3 percent to $1.3443. The yield on the German five-year note rose one basis point to 1.12 percent. Oil climbed 0.6 percent, copper advanced 1.5 percent and palladium gained to a two-month high.
Germany plans to sell 5 billion euros ($6.7 billion) of five-year notes today in the first test of demand since Standard & Poor’s said Dec. 5 the nation’s credit rating was at risk. Officials are negotiating a bigger rescue effort to discuss at the European summit, including running two separate bailout funds simultaneously, the Financial Times reported yesterday.
“There is an expectation in the market that Europe will advance measures to overcome the debt issues,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “Investors still want to see the results of meetings this week of the European Union and European Central Bank.”
More than eight shares advanced for every one that fell in the Stoxx 600. Banks led gains with Deutsche Bank AG and BNP Paribas SA increasing at least 2 percent.
The cost of insuring against default on European government and bank debt fell. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments dropped 10 basis points to 315, while the Markit iTraxx Financial Index of contracts linked to the senior bonds of 25 banks and insurers declined 18 basis points to 249.
Oil in New York advanced to $101.90 a barrel on speculation global supplies of crude will shrink after the European Union signaled it may ban imports from Iran and U.S. stockpiles declined. Palladium rose as much as 2.7 percent to $688.50 an ounce, the highest since Sept. 22.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
