Stocks Advance With Copper on China as Crude, Yen Drop
<cite class="byline" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; font-size: 11px; vertical-align: baseline; background-color: transparent; width: 640px; color: rgb(111, 111, 111); display: block; font-style: normal; line-height: 1.3em; position: static !important; background-position: initial initial; background-repeat: initial initial;">By Stephen Kirkland & Julia Leite - Sep 3, 2013 1:26 AM GMT+0800</cite>
Stocks climbed around the world and copper rallied as manufacturing in China and Europe expanded and prospects of an imminent strike on Syria faded. The yen weakened, bonds declined and crude oil fell for a third day.
The MSCI All-Country Index added 0.6 percent to 366.2 at 1:10 p.m. in New York. Standard & Poor’s 500 Index (SPA) futures advanced 1 percent. Copper jumped the most in three weeks and silver climbed 2.9 percent while West Texas Intermediate oil dropped 0.7 percent. Japan’s currency weakened against all of its 16 major counterparts. Brazil’s Ibovespa (IBOV) jumped the most in five months, posting the best performance among major equities gauges worldwide. Mexico’s peso rose from a one-year low.
China’s economy is strengthening after a two-quarter slowdown, with a manufacturing index rising to a 16-month high in August. Euro-area factory output expanded at a faster pace than initially estimated in August and Spanish manufacturing gained for the first time since April 2011, according to data from Markit Economics. In the U.S., where markets are closed today, President Barack Obama delayed action against Syria by seeking approval from Congress.
“The market seems to be taking a good deal of relief from the data pretty much across the board,” Christopher Palmer, who oversees about $2.5 billion as the London-based director of global emerging markets at Henderson Global Investors Ltd., said by phone. “It’s pretty encouraging after a disappointing August where you’ve had a build up for a potential military action in Syria. Now that seems to have been pushed back a bit.”
European Stocks
The Stoxx 600 jumped 1.9 percent, the most in eight weeks, as a gauge of commodity producers posted the biggest gain of the 19 industry groups on the equity benchmark. Trading volumes were 25 percent less than the 100-day average, according to data compiled by Bloomberg. BHP Billiton Ltd. and Rio Tinto Group, the world’s two largest mining companies, climbed 2.3 percent and 4.2 percent in London. The gauge had lost 0.5 percent last month.
Spain’s IBEX 35 Index rallied 1.7 percent. The measure of manufacturing activity for the country climbed to 51.1 in August from 49.8 in July.
Vodafone Group Plc (VOD) added 3.4 percent to the highest since 2001. Verizon Communications Inc. agreed to acquire Vodafone’s 45 percent stake in Verizon Wireless in a $130 billion transaction that has been approved by both companies’ boards and is expected to be completed in the first quarter of 2014, according to a statement today.
The MSCI Emerging Markets Index advanced 1 percent to a two-week high on a closing basis. Turkey’s benchmark equity gauge climbed 3.2 percent and the lira advanced 0.9 percent after the delay in U.S. action against neighboring Syria.
Brazil Rally
Brazil’s Ibovespa increased 3.3 percent as steelmaker Cia. Siderurgica Nacional led commodity producers higher, jumping 5.3 percent. Iron-ore producer Vale SA, whose top export market is China, rose to a one-week high. OGX Petroleo e Gas Participacoes SA, the oil companycontrolled by former billionaire Eike Batista, surged as much as 43 percent after posting a record plunge on Aug. 30.
Brazil’s purchasing managers’ index for manufacturing rose to 49.4 in August from 48.5 in July, Markit Economics reported today.
The Ibovespa trades at 12.6 times analysts’ earnings estimates for the next four quarters, which compares with a ratio of 16.3 times for Mexico’s IPC index and 14.3 for India’s Sensex.
Carlos Slim
Mexico’s peso strengthened as concern eased that a U.S. strike on Syria was imminent. The currency added 0.5 percent to 13.3189 per U.S. dollar after falling on Aug. 30 to 13.38, the weakest level since August 2012. The peso tumbled 3.2 percent last week, the biggest decline among major currencies tracked by Bloomberg.
Billionaire Carlos Slim’s Minera Frisco SAB dropped 2.8 percent, the biggest decliner in Mexico’s IPC index. The country’s exchange canceled some erroneous trades that caused the shares to double in price on Aug. 30, according to a bourse official with direct knowledge of the decision.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kongrose 2.3 percent, the most since Aug. 13. China’s PMI was at 51.0, an official report showed yesterday. The median estimate in a Bloomberg survey was 50.6. A separate manufacturing PMI released today by HSBC Holdings Plc and Markit Economics rose to 50.1 last month from 47.7 in July, the biggest gain in three years and the first reading above 50 since April.
India’s rupee dropped 0.5 percent while the S&P BSE Sensex gained 1.4 percent. The nation’s economy grew 4.4 percent in the three months to June from a year earlier, the weakest pace since 2009, the government reported on Aug. 30.
Bond Yields
The won climbed 0.9 percent to the highest level in more than three months after South Koreareported a trade surplus that was double what economists predicted.
The yen fell 1.2 percent to 99.32 per dollar and reached 99.43, the weakest level since Aug. 2. The euro declined 0.2 percent to $1.3193.
U.K. 10-year gilt yields climbed as much as nine basis points to 2.865 percent, the highest since Aug. 1, 2011. The pound strengthened to the highest level versus the euro in two months as a report showed U.K. house price growth quickened in August, adding to signs that the economy is recovering. Sterling appreciated 0.5 percent to 84.89 pence per euro after reaching 84.72 pence, the strongest level since June 26.
Germany’s 10-year bund yield rose five basis points to 1.91 percent and France’s added three basis points to 2.5 percent.
Copper snapped a three-day losing streak. WTI fell as low as $104.21 a barrel and U.S. natural gas jumped as much as 3 percent to a five-week high of $3.689 per million British thermal units on speculation warmer weather will boost demand for electricity to power air conditioners.
Commodities outperformed stocks and bonds last month. The S&P GSCI gauge of 24 raw materials rose 3.4 percent in August as U.S. crude reached a two-year high and gold rallied close to a bull market. The MSCI All-Country World Index of equities declined 2 percent including dividends and the BofA Merrill Lynch Global Broad Market Index of debt fell 0.352 percent.
To contact the reporters on this story: Stephen Kirkland in London at [email protected]; Julia Leite in New York at [email protected]
To contact the editor responsible for this story: Stuart Wallace at [email protected]; David Papadopoulos at [email protected]
