BLBG: Europe Stocks Climb With Asia as Treasuries Hold Gain
European and Asian shares climbed while Treasuries held their biggest monthly gain since January before the Federal Reserve reviews monetary policy. Nasdaq 100 Index futures dropped as Facebook (FB) Inc. tumbled and oil gained with nickel.
The Stoxx Europe 600 Index rose 0.5 percent by 8:19 a.m. in London, while the MSCI Asia Pacific Index added 1.3 percent as Hong Kong’s Hang Seng Index erased losses from pro-democracy protests. German-traded shares of Facebook plunged 6.4 percent as it projected lower-than-estimated fourth-quarter sales, dragging futures on the Nasdaq gauge lower by 0.2 percent. Oil rose for a second day and nickel is heading for its biggest two-day jump since May. Russia’s ruble slid a sixth day.
The Fed is on track to announce the end of its bond-buying program while leaving its key interest rate near zero, analysts surveyed by Bloomberg before today’s announcement said. The Standard & Poor’s 500 Index closed within 1.5 percent of a record amid better-than-estimated earnings and after consumer confidence jumped to a seven-year high. Japanese factory output soared the most in eight months in September, data today showed, with a Chinese confidence report also due.
“Certainly some of the numbers coming out of the U.S. and Japan have been a lot better than expected,” Sean Darby, chief global strategist at Jefferies Group LLC in Hong Kong, told Bloomberg TV. Fed policy makers “have everything as settled as they possibly could have at the moment. It’s a benign environment.”
Factory Production
All 19 groups on the Stoxx 600 climbed today, with healthcare gaining the least as Sanofi plunged 5.3 percent after the French drugmaker removed Chief Executive Officer Chris Viehbacher.
Total SA climbed 1.2 percent after news CEO Patrick Pouyanne said he’ll continue with cost-cutting measures after reporting slowing profit that beat analysts’ estimates.
Oil-services firm Fugro NV tumbled 19 percent after saying third-quarter results are significantly below expectations and that it doesn’t plan a 2014 dividend amid a slowdown in the energy market.
The MSCI Asia Pacific is heading for its highest close since Sept. 29. All 10 groups advanced, led by industrial companies.
The Topix index climbed 1.5 percent in Tokyo, its highest close since Oct. 8. The yen, regarded as a haven by some investors, strengthened 0.1 percent to 108.05 per dollar after sinking 0.3 percent last session.
Japanese industrial production increased 2.7 percent in September from the previous month, the trade ministry said today, beating the median estimate for a 2.2 percent climb. Output contracted 1.9 percent in August.
BOJ Meets
The Bank of Japan, engaged in its own economic stimulus program, also meets this week and will release a statement on monetary policy Oct. 31.
Hong Kong’s Hang Seng Index added 1.3 percent and is poised to close at a level not seen since before pro-democracy protesters were tear-gassed by police a month ago, sparking street blockades that are still in place today. A gauge of Chinese shares in the city jumped 1.7 percent and the Shanghai Composite Index rose 1.5 percent to cap its biggest two-day jump since March.
Shares of Facebook sank to $74.15 after the close in New York. The stock finished ordinary trading at $80.77. The Menlo Park, California-based company’s chief financial officer said the social network faces a “more difficult comparison” in the current quarter compared with a year earlier.
Nasdaq 100 futures dropped to 4,085 after the technology-heavy index jumped 1.5 percent in U.S. trading yesterday. Facebook has the fourth-highest weighting on the Nasdaq 100. S&P 500 contracts were little changed.
Fed Comments
Fed policy makers led by Chair Janet Yellen will end their asset-purchase program as planned, according to 62 of 64 economists surveyed by Bloomberg News. By smaller margins, most also expect officials to reiterate rates will stay low for a “considerable time” and that there’s a “significant underutilization of labor resources.”
Minutes from the last meeting showed officials expressed concern that U.S. growth may be at risk from a global slowdown.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, slipped 0.1 percent after falling 0.3 percent last session in a third declining day.
The euro added 0.1 percent to $1.274 and the New Zealand dollar climbed 0.3 percent. South Korea’s won appreciated for a third day, strengthening to 1,047.33 per dollar, the highest since Sept. 29, while Indonesia’s rupiah added 0.7 percent for its first gain in six days.
The ruble fell 0.6 percent to 42.7245, after touching 42.724, a record low. The currency weakened 0.7 percent to 54.426 per euro. The ruble’s persistent weakening in the face of $24 billion of interventions is stoking speculation the Bank of Russia will accelerate its switch to a free float.
Oil Gains
Ten-year Treasury yields slipped two basis points to 2.28 percent after rising four basis points in New York. The Bloomberg U.S. Treasury Index (BUSY) is up 1.3 percent this month, the most since January. Yields on 10-year Australian bonds rose by six basis points, or 0.06 percentage point, to 3.30 percent.
West Texas Intermediate crude added 0.5 percent to $81.81 a barrel after rising 0.5 percent in the previous session. Brent crude gained 0.4 percent to $86.39 a barrel following yesterday’s 0.2 percent climb.
U.S. crude stockpiles probably expanded to the highest level since July last week, a Bloomberg News survey showed before a government report today. WTI slid on Oct. 22 to its lowest settlement price since July 2012 amid concern global oil output is outpacing supply. Both WTI and Brent entered bear markets this month.
Nickel had the biggest two-day jump in five months amid speculation that output of a cheaper alternative will ebb in China, the world’s top user of industrial metals. The metal for delivery in three months on the London Metal Exchange rose 1.9 percent to $15,779 a metric ton after a 5.1 percent surge yesterday.
To contact the reporters on this story: Emma O’Brien in Wellington at eobrien6@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editors responsible for this story: Emma O’Brien at eobrien6@bloomberg.net; Nick Gentle at ngentle2@bloomberg.net Nick Gentle
