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Monday, 2 September 2013
Stocks Advance With Metals on China as Crude, Yen Drop
By Richard Frost & Adam Haigh - Sep 2, 2013 12:19 AM PT
Stocks climbed around the world and metals rallied as Chinese manufacturing expanded and prospects of an imminent strike on Syria faded. The yen weakened and the Australian dollar rallied, while crude oil fell for a third day.
The MSCI All-Country Index added 0.5 percent at 8:14 a.m. in London. Standard & Poor’s 500 Index (SPA) futures advanced 0.8 percent. Copper jumped 1.9 percent and silver rose 2.9 percent. Japan’s currency fell against all its major peers, while the Aussie strengthened 0.9 percent versus the dollar. Germany’s 10-year bund yield climbed six basis points to 1.91 percent. West Texas Intermediate crude slid 1.2 percent to $106.35 a barrel.
A financial trader uses a telephone as he monitors data on his computer screens at the Frankfurt Stock Exchange in Frankfurt. Photographer: Ralph Orlowski/Bloomberg
Sept. 2 (Bloomberg) -- Sam Le Cornu, portfolio manager at Macquarie Investment Management, talks about Asian stocks and his investment strategy. He speaks with Susan Li on Bloomberg Television's "Asia Edge." (Source: Bloomberg)
Sept. 2 (Bloomberg) -- Timothy Riddell, Singapore-based head of global markets research at Australia & New Zealand Banking Group Ltd., talks about the economic outlook for India, Indonesia and China. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
China’s economy is strengthening after a two-quarter slowdown, with a manufacturing gauge rising to a 16-month high in August. Data today may show euro region factory output maintained growth in August. India’s slowest economic expansion since 2009 is adding pressure on Prime MinisterManmohan Singh to stem a slide in the rupee. In the U.S., where markets are closed today, President Barack Obamadelayed action against Syria by seeking approval from Congress.
“Growth expectations globally continue to improve,” Michael Kurtz, Hong Kong-based chief global equity strategist at Nomura Holdings Inc., Japan’s largest brokerage, said in an e-mail. “An ongoing rebalancing in China keeps growth there largely on a moderating trend.”
The Stoxx Europe 600 Index rose 1.3 percent. Vodafone Group Plc (VOD) jumped 4.5 percent. Verizon Communications Inc. is poised to announce an agreement as soon as today to acquire Vodafone’s 45 percent stake in their wireless venture for $130 billion, capping its decade-long pursuit of full control of the biggest U.S. mobile-phone carrier.
About two stocks rose for each that declined on the MSCI Asia Pacific Index, which climbed 0.7 percent. Japan’s Topix Index rose 1.1 percent, Hong Kong’s Hang Seng Index climbed 1.9 percent and Australia’s S&P/ASX 200 Index (AS51) advanced 1 percent. Indonesia’s Jakarta Composite Index slumped 2.4 percent after the nation reported a bigger-than-expected trade deficit.
China’s Purchasing Managers’ Index 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.
The nation’s biggest offshore energy explorer Cnooc Ltd. (883) climbed 3 percent in Hong Kong, the biggest contributor to gains on MSCI’s Asia energy gauge. Everbright Securities Co. tumbled by the 10 percent daily limit in Shanghai after errant trades drew a record penalty from China’s securities regulator and two executives resigned.
The Aussie appreciated to 89.78 U.S. cents, after slipping 1.4 percent last week, a third weekly decline. The Australian Industry Group’s performance of manufacturing index rose to 46.4 in August, from 42 in July, figures today showed. The Reserve Bank of Australia will keep the cash rate target at 2.5 percent tomorrow, according to a Bloomberg survey. New Zealand’s currency, known as the kiwi, climbed 0.9 percent.
The yen slipped to 98.83 per dollar after speculators added to bearish bets on the currency and on signs Japan’s prime minister is making progress on policies that have helped weaken the currency. The yen slid from a two-week high against the euro as Shinzo Abe got backing for a sales-tax increase from panels that urged an increase in stimulus to cushion the economic blow.
The won climbed 0.9 percent to the highest level in more than three months after South Korea reported a trade surplus that was double what economists predicted.
India’s rupee dropped 0.2 percent to 65.85 per dollar and the S&P BSE Sensex gained 1.5 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.
The rupee plunged 8.1 percent last month in its worst performance since 1992 on concern the deepening economic slowdown will deter investors as the U.S. prepares to pare stimulus. The currency climbed 4.8 percent in the last two trading days, the biggest two-day advance since September 2011, after the central bank said on Aug. 28 that it will supply dollars directly to local oil importers.
Brent crude lost 0.8 percent today to $113.12 a barrel. Contracts on gasoline due in October also retreated, declining 1.2 percent, while natural gas futures jumped 1.8 percent.
President Obama’s decision to seek congressional authority to attack Syria for alleged chemical weapons use has dismayed friends, delighted foes and prompted criticism that he’s undermined U.S. credibility.
In Syria, where President Bashar al-Assad learned the tactics of brute force from his father, Hafez, state-controlled media hailed the start of a “historic American retreat.”
Copper for three-month delivery on the London Metal Exchange rose to $7,235 a metric ton, after sliding 3.5 percent last week. Gold was little changed at $1,393.69 an ounce, after dropping 1.6 percent over the previous two trading days. Silver climbed to $24.20 an ounce.
Commodities outperformed stocks and bonds last month. The S&P GSCI gauge of 24 raw materials rose 2.9 percent in August, while the MSCI All-Country World Index of equities declined 2.3 percent and the BofA Merrill Lynch Global Broad Market Index of debt fell 0.4 percent.