BLBG:Stocks Climb With Commodities on Economic Stimulus
Stocks and commodities rallied as China vowed to maintain its growth target and investors bet central banks will continue stimulus measures. U.S. equity-index futures rose after the Dow Jones Industrial Average climbed to within 0.3 percent of a record close yesterday.
The Stoxx Europe 600 Index climbed 1.2 percent at 6:35 a.m. in New York. Dow futures climbed 0.2 percent. The Shanghai Composite Index (SHCOMP) rebounded 2.3 percent from its biggest loss since August 2011. The Standard & Poor’s GSCI gauge of 24 commodities rose 0.4 percent, as copper jumped 0.6 percent and New York oil advanced 0.2 percent. Italy’s 10-year bond yield fell 11 basis points to 4.77 percent and the rate on similar- maturity Portuguese notes fell to a one-month low.
China will keep its economic growth target at 7.5 percent for this year and plans a 10 percent jump in fiscal spending, the government said during the start of the National People’s Congress today. European finance chiefs may next month commit to giving Ireland and Portugal more time to repay bailout loans, Economic and Monetary Affairs Commissioner Olli Rehn said yesterday. Euro-area services output shrank less than initially estimated in February, a report showed before U.S. data that many indicate the services industry kept growing last month.
“The continued penchant for monetary largesse by the major central banks around the world still does provide an unprecedented cushion,” said Benjamin Yeo, the Singapore-based head of Asian investment strategy at Barclays Plc’s wealth management unit, which has about $250 billion under management. “The risk-on mode will prevail for the remainder of 2013.”
Record Profit
The Stoxx 600 climbed to its highest level since August 2008. A gauge of lenders contributed the most to the equity benchmark’s rally as Standard Chartered Plc gained 2.8 percent after reporting pretax profit for 2012 that exceeded analysts’ estimates. Profit set a record for a 10th consecutive year. Glencore International Plc rose 3 percent after saying it will complete the takeover of Xstrata Plc by April 16. Xstrata added 3.8 percent after also posting net income that beat estimates.
Serco Group Plc surged 9.2 percent, the biggest rally on the Stoxx 600 (SXXP), after the operator of London’s Docklands Light Railway increased its dividend by 20 percent.
Futures on the Dow and S&P 500 climbed, indicating the equity benchmark indexes will narrow their gap to record highs reached in October 2007.
Services Grow
The Institute for Supply Management’s index of U.S. non- manufacturing businesses, which covers almost 90 percent of the economy, kept growing last month, according to the Bloomberg median estimate. The index was little changed at 55 in February after 55.2 the prior month. Readings greater than 50 signal expansion.
The yield on Portugal’s 10-year bond fell 23 basis points to 6.16 percent. Spain’s 10-year bond yield fell for a fifth day, dropping six basis points to 5.03 percent. German bund yields climbed three basis points to 1.45 percent amid reduced demand for Europe’s benchmark government debt.
Credit-default swaps insuring against losses on Cyprus government debt were quoted 64 basis points lower at 595 by data provider CMA. A net $308 million of Cypriot bonds are covered by the contracts, which have dropped from 965 basis points on Feb. 22 as European Union finance ministers prepare a bailout for the island nation.
The cost of insuring against default on corporate debt also declined, with the Markit iTraxx Europe index of credit-default swaps linked to 125 investment grade companies falling 1.5 basis points to 115, the lowest in more than a week.
Aussie Gains
Australia’s currency rallied 0.3 percent to $1.0222 after the Reserve Bank kept interest rates on hold.
Commodities rose as much as 0.6 percent, the most since Feb. 25, after falling 2.8 percent the past five days. West Texas Intermediate oil rose to $90.37 a barrel. Copper gained for a second day. China is the biggest buyer of energy and industrial metals.
The MSCI Emerging Markets Index (MXEF) rose 0.7 percent, snapping a two-day retreat. The Shanghai Composite Index rallied after falling 3.7 percent yesterday, its biggest decline since August 2011. India’s Sensex climbed 1.4 percent, the most in three months, and Russia’s Micex index added 0.5 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Pratish Narayanan in Mumbai at pnarayanan9@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net;
