Thursday, March 8, 2012

Stocks, Commodities Rise Before Greek Swap

Stocks (MXWD) rose for a second day, while commodities gained and the dollar fell after Japan’s economy shrank less than initially estimated. The euro strengthened and Italian bonds advanced as Greece moved closer to completing its debt swap.


The MSCI All-Country World Index (MXWD) added 0.8 percent at 9:35 a.m. in London, and Standard & Poor’s 500 Index futures increased 0.7 percent. The euro appreciated 0.5 percent to $1.3217, while the yen weakened against all 16 of its most- traded peers.

The yield on the 10-year Italian bond slid 10 basis points to 4.84 percent. The S&P GSCI gauge of commodities climbed 0.6 percent, led by gains in industrial metals.Japan’s gross domestic product shrank an annualized 0.7 percent in the fourth quarter, compared with an earlier estimate for a 2.3 percent contraction, the government said.

Investors with about 60 percent of eligible Greek bonds have agreed to participate in the world’s biggest sovereign debt restructuring. German industrial output probably rose and U.S. jobless claims stayed at an almost four-year low, economists said before reports today.

“We have space to rally,” Marino Valensise, chief investment officer at Baring Asset Management Ltd. said in a Bloomberg Television interview from Hong Kong. The firm oversees $46 billion. “Greece is okay for now, but this is a short-term solution to a longer-term problem.”

The Stoxx Europe 600 Index climbed 1.3 percent as 10 shares advanced for every one that fell. European Aeronautic, Defence & Space Co. (EAD) rallied 8.6 percent to a five-year high after doubling its dividend and predicting earnings will climb.

Gemalto NV jumped 5.7 percent as the inventor of the smart chip used in bank and phone cards forecast revenue and operating profit will increase this year.

Jobless Claims

The increase in S&P 500 futures indicated the U.S. gauge will climb for a second day. The Labor Department will report monthly jobs data tomorrow, which economists forecast will show an increase of 225,000 private jobs and total non-farm payrolls growth of 210,000.

The 17-nation euro appreciated 0.7 percent against the yen, rising for the second consecutive day versus the Japanese and U.S. currencies. The pound rose 0.3 percent versus the dollar before the Bank of England announces its latest decisions on interest rates and the bond-buying program at noon London time.

Policy makers will keep the benchmark rate at 0.5 percent and asset purchase target unchanged, according to median forecasts in surveys of economists by Bloomberg.

Bunds Fall

The extra yield investors demand to hold Italian 10-year debt instead of benchmark German bunds fell 15 basis points, with the Spanish-German yield spread narrowing six basis points. The yield on the bund advanced three basis points, snapping a two-day decline.

The cost of insuring against default on European sovereign debt fell for a second day. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments dropped two basis points to 352.

Copper advanced 0.6 percent to $7,346 a metric ton and New York oil increased 0.4 percent to $106.62 a barrel. Lead jumped 1.7 percent to $2,126 a ton.

The MSCI Emerging Markets Index (MXEF) rose 1 percent, snapping a three-day slump. Hon Hai Precision Industry Co. (2317) led Apple Inc. suppliers higher after the U.S. company introduced a new version of its IPad.

The ISE National 100 Index (XU100) gained 1 percent in Istanbul and China’s Shanghai Composite Index (IFB1) increased 1.1 percent. Vietnam’s VN Index (VNINDEX) sank 2.8 percent, the biggest drop among major stock benchmarks tracked by Bloomberg, after the government raised gasoline prices.

bloomberg.com

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