BLBG: Stocks, Commodities Rally on China Production as Bonds Decline
By Justin Carrigan
Dec. 11 (Bloomberg) -- Stocks rose and copper advanced for the first time in seven days while government bonds and the yen fell after China’s industrial production grew more than economists forecast, adding to evidence the nation is leading the global rebound.
The MSCI World Index of 23 developed nations’ stocks climbed 0.5 percent at 10:16 a.m. in London, paring its decline this week to 0.7 percent. Futures on the Standard & Poor’s 500 Index added 0.6 percent. The yen weakened against all 16 most- traded currencies tracked by Bloomberg and the yield on the 10- year German bund rose 3 basis points.
“After a bit of stress at the beginning of this week, things are calming down,” said David Deddouche, a currency strategist at Societe Generale SA in Paris. “The Chinese numbers weren’t bad and stocks worldwide are performing well.”
China’s industrial production increased 19.2 percent in November and imports surged, boosting investor confidence in the worldwide recovery and spurring demand for higher-yielding assets. Net flows into emerging-market equity and bond funds were $2.6 billion in the week ended Dec. 9, according to Cambridge, Massachusetts-based EPFR Global. A government report today may show that U.S. retail sales rose for the third time in four months.
European Stocks
Europe’s Dow Jones Stoxx 600 Index climbed 0.9 percent, as all 19 industry groups rallied. BHP Billiton Ltd., the world’s biggest mining company, added 2 percent in London. ING Groep NV surged 5.4 percent in Amsterdam after the bank said it will repay 5.6 billion euros ($8.3 billion) in government aid.
The MSCI Asia Pacific Index rose 0.8 percent. Japan’s Nikkei 225 Stock Average rallied 2.5 percent, its biggest gain in more than a week. Nissan Motor Co. climbed 3.9 in Toyko and Maanshan Iron & Steel Co. advanced 10 percent in Hong Kong.
U.S. futures indicate the S&P 500 may extend yesterday’s 0.6 percent advance. U.S. retail sales may have increased 0.6 percent in November, according to the median estimate of 79 economists surveyed by Bloomberg News, a sign consumers are joining the emerging recovery. The Commerce Department is scheduled to release the report at 8:30 a.m. in Washington.
The Reuters/University of Michigan preliminary index of consumer sentiment for December probably rose to 68.8 from a final reading of 67.4 a month earlier, according to a separate survey of economists.
Emerging Markets
The MSCI Emerging Markets Index gained 0.6 percent to the highest in four days as Poland’s WIG 20 Index rose 1.3 percent. The additional yield on bonds in developing countries over U.S. Treasuries narrowed seven basis points to 3.01 percentage points, the tightest gap since Oct. 16. The ruble soared 1.5 percent against the dollar, heading for the steepest advance in four months.
Germany led declines in government bonds, with the yield on the 10-year bund rising to 3.21 percent, the highest level in almost a week, as concern eased that Greece and Spain may struggle to pay their debt. Greek two-year notes rose for the first time in seven days. Ten-year U.K. gilts fell, pushing the yield up 1 basis point to 3.82 percent, after a 14-point increase yesterday.
The yen weakened, falling 1 percent against the euro and 0.8 percent compared with the dollar.
The cost of protecting government debt in the credit- default swaps market fell, with the Markit iTraxx SovX Western Europe index dropping 3 basis points to 63.5. Contracts on Dubai fell 36.5 basis points to 526, two weeks after the Gulf state sought to delay bond repayments, while Qatar dropped 10 basis points to 102.5, according to CMA DataVision prices.
Nakheel Bond
Nakheel PJSC’s $3.2 billion bond due Dec. 14, part of the debt Dubai said it wanted to restructure, rose to 54.125 cents on the dollar, the highest intraday price since Dec. 7, from 51.625 cents yesterday, according to Citigroup Inc.
Credit-default swaps on the Markit iTraxx Crossover Index of 50 mostly high-yield European companies declined as much as 9.5 basis points to 479, the lowest level since June 2008, according to JPMorgan Chase & Co. prices.
Copper for delivery in three months rose 1.2 percent to $6,889.25 a metric ton on the London Metal Exchange, leading a gain in industrial metals. Crude oil for January delivery added 0.7 percent to $71.01 a barrel in New York trading. Gold for immediate delivery rose for a third day in London, advancing 0.7 percent to $1,139 an ounce.
To contact the reporter on this story: Justin Carrigan at jcarrigan@bloomberg.net
