BP Holdings: Stocks Advance With Copper on China as Crude, Yen Drop
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 World Index added 0.6 percent to 366.21, as Standard & Poor’s 500 Index (SPA) futures rose 1 percent. Copper jumped the most in three weeks and silver climbed 2.8 percent while West Texas Intermediate oil dropped 0.8 percent. The yen slipped against its 16 major peers. Brazil’s Ibovespa (IBOV) jumped the most in three weeks for the world’s biggest advance. Mexico’s peso strengthened from a one-year low.
China’s manufacturing index rose to a 16-month high in August, while other gauges showed 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 military 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 buildup for a potential military action in Syria. Now that seems to have been pushed back a bit.”
MSCI’s All-Country gauge slipped 2.3 percent in August, the third decline in four months.
The Stoxx Europe 600 Index jumped 1.9 percent, the most in eight weeks, as a measure of commodity producers posted the biggest gain of 19 industry groups. 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 respectively in London.
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 level 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 0.9 percent to a two-week high. Turkey’s benchmark equity gauge climbed 3.2 percent and the lira appreciated 0.8 percent amid the delay in U.S. action against neighboring Syria.
Brazil’s Ibovespa climbed 3.7 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 3 percent to a one-week high. OGX Petroleo e Gas Participacoes SA, the oil company controlled by former billionaire Eike Batista, surged as much as 43 percent after posting a record plunge Aug. 30.
Brazil’s purchasing managers’ index for manufacturing rose to 49.4 in August from 48.5 in July, Markit Economics reported today. Figures below 50 indicate a contraction.
The Ibovespa trades at 12.7 times analysts’ earnings estimates for the next four quarters, compares with a valuation of 16.4 times for Mexico’s IPC Index and 14.3 for India’s S&P BSE Sensex Index.
Mexico’s peso strengthened as concern eased that a U.S. strike on Syria was imminent, supporting emerging-market assets. The currency added 0.3 percent to 13.3351 per dollar after falling 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 1.4 percent. The country’s exchange canceled some erroneous trades that caused the shares to double in price Aug. 30, according to a bourse official with direct knowledge of the decision. They asked not to be identified because they weren’t authorized to speak on the matter.
The Hang Seng China Enterprises Index (HSCEI) of mainland Chinese companies listed in Hong Kong rose 2.3 percent, the most since Aug. 13. China’s official PMI came in at at 51.0, compared with the median estimate in a Bloomberg survey of 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 versus the dollar while the 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 Aug. 30.
The won climbed 0.9 percent to the strongest level in three months after South Korea reported a trade surplus that was double what economists predicted.
The yen weakened 1.2 percent to 99.33 per dollar after touching 99.43, the weakest level since Aug. 2. The euro declined 0.2 percent to $1.3192.
U.K. 10-year gilt yields climbed eight basis points, or 0.08 percentage point, to 2.85 percent, the highest level since July 2011. The pound strengthened to its highest level versus the euro in two months as U.K. house-price growth quickened in August, adding to signs that the economy is recovering. Sterling appreciated 0.4 percent to 84.89 pence per euro after reaching 84.72 pence, the strongest level since June 26.
Germany’s 10-year bund yield increased four basis points to 1.90 percent and France’s yield added three basis points to 2.50 percent.gpo
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.