BLBG: Commodities Rise Amid Signs of Chinese Economic Recovery
Commodities rose and Chinese stocks rallied the most in three years as a manufacturing survey added to signs of recovery in the world’s second-biggest economy. U.S. index (MXEF) futures and most European shares gained, while Japan’s yen weakened for the fourth day against the euro.
The Standard & Poor’s GSCI gauge of 24 commodities climbed 0.6 percent at 7:40 a.m. in New York as oil jumped 0.9 percent and nickel gained 0.7 percent. S&P 500 index futures added 0.2 percent, while the Stoxx Europe 600 Index swung between gains and losses. Japan’s currency declined against most of its major peers and traded at the lowest level in more than eight months against the euro. Spanish and Italian bonds rose.
Reports earlier today showed China’s factory production may expand at a faster pace this month, while confidence worsened among Japanese manufacturing companies. The U.S. releases inflation and industrial production figures today. President Barack Obama and Republican House Speaker John Boehner remained deadlocked yesterday during their third White House meeting on next year’s budget.
“The most recent China manufacturing data is indeed encouraging for commodities as China is still one of the biggest consumers for many natural resources,” said Frederique Dubrion, president and chief investment officer of Blue Star Advisors SA in Geneva. “Monetary-easing programs and the stabilizing global outlook will give more opportunity within materials.”
Oil Advances
Oil rose 0.9 percent to $86.69 a barrel in New York. Nickel jumped 0.7 percent and zinc rose 0.5 percent. China is the world’s biggest buyer of industrial metals.
The reading on the Chinese purchasing managers’ index was 50.9, according to HSBC Holdings Plc and Markit Economics, compared with the 50.8 median estimate of economists surveyed by Bloomberg News. November’s final reading was 50.5, the first time in 13 months that the gauge exceeded the 50 mark dividing expansion from contraction.
The Shanghai Composite Index gained 4.3 percent, its biggest rally since October 2009. Hong Kong’s Hang Seng Index rose 0.7 percent. Japan’s Topix Index, a broad gauge of stocks, closed above 800 for the first time since April.
Futures on the S&P 500 climbed, indicating the gauge will rebound from yesterday’s decline. Adobe Systems Inc. rallied 6.1 percent in early New York trading after reporting fiscal fourth- quarter sales and profit that exceeded analysts’ estimates.
More than three stocks rose for every two that fell on the Stoxx 600. (SXXP) Akzo Nobel surged 7 percent, its biggest advance in 14 months, as PPG Industries Inc. agreed to buy the Dutch company’s North American paint business for $1.05 billion.
Alcatel Lucent
Alcatel-Lucent SA (ALU) soared 11 percent after the company reached a 1.6 billion-euro ($2.1 billion) financing deal. The French phone-equipment maker’s bonds rose to the highest in eight months. Its 8.5 percent notes due 2016 climbed 4.1 percent to 102.4 cents on the euro.
Japan’s large manufacturers became the most pessimistic since March 2010, the central bank’s quarterly survey showed. The Tankan index fell to minus 12 in December from minus 3 in September, its fifth straight negative reading. The median estimate of economists surveyed by Bloomberg News had called for a reading of minus 10. A negative figure means that pessimists outnumber optimists.
The yen depreciated 0.2 percent against the euro to 109.60 after reaching 109.98, its weakest level since April 2. Japan’s currency slid 0.1 percent to 83.76 per dollar. The euro was little changed at $1.3084. Spain’s 10-year bond yield fell three basis points to 5.37 percent, while the rate on similar-maturity Italian debt dropped six basis points, to 4.58 percent.
The MSCI Emerging Markets Index snapped a seven-day rally, declining 0.2 percent, as technology companies fell.
The Egyptian pound strengthened 0.1 percent to 6.1684 per dollar, recovering from its weakest level in eight years, as supporters and opponents of President Mohamed Mursi plan protests before a referendum on a draft constitution that has polarized voters. Cairo and nine other governorates will vote tomorrow, with the rest of the country taking part a week later.
To contact Bloomberg News staff for this story: Will Hadfield in London at whadfield@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
