BS: Copper Jumps After Earthquake; Stocks, Oil, Greek Bonds Advance
By Stuart Wallace
March 1 (Bloomberg) -- Copper rose the most in 11 months after the earthquake in Chile, the world’s biggest producer, cut production. Stocks advanced, oil topped $80 a barrel and Greek bonds rallied.
Copper gained as much as 6.2 percent, the most since April, and nickel climbed 2.1 percent. Europe’s Dow Jones Stoxx 600 Index added 0.6 percent at 10:24 a.m. in London and the MSCI Emerging Markets Index increased 1 percent. Futures on the Standard & Poor’s 500 Index rose 0.5 percent. The yield on the two-year Greek note fell 27 basis points to 5.81 percent.
Chile exports 36 percent of the world’s copper ores and concentrate, and mines were closed by the magnitude-8.8 earthquake Feb. 27. European Union officials may demand deeper budget cuts from Greece in meetings today as euro countries consider whether to help the nation fund the biggest deficit in the region. U.S. manufacturing probably expanded in February for a seventh consecutive month.
“The price jump in copper today is pulling up the other commodities as well,” said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. “Copper often acts as a leading indicator, not only for the economy, but also for commodities in general.”
Copper rose as high as $347.25 a pound in New York trading, erasing this year’s decline. Lead, zinc and tin also rose in London. Oil for April delivery on the New York Mercantile Exchange rose 0.9 percent to $80.34 a barrel. Gold gained 0.3 percent to $1,120.45 an ounce.
Greek Rally
Greek bonds and stocks rallied as European Union governments crafted a possible rescue package. The yield on the two-year Greek note slid 46 basis points to 5.68 percent after tumbling as much as 69 basis points, the biggest decline since Feb. 10. The cost of insuring Greek bonds against default fell, with credit-default swaps tied to the nation’s debt dropping 27 basis points to 337, according to CMA DataVision.
The ASE Index of equities rose for a second day, advancing as much as 3.1 percent.
The MSCI World Index of 23 developed nations’ stocks gained 0.2 percent. BHP Billiton Ltd. and Rio Tinto Group both advanced 2 percent as commodities climbed. Vivendi SA surged as much as 4.2 percent after the owner of the world’s largest video-game company reported earnings that beat estimates. American International Group Inc. rallied 7.3 percent after Prudential Plc said it had agreed to buy one of AIG’s Asian life-insurance units for $35.5 billion. Prudential was suspended.
U.S. Futures
The gain in U.S. futures suggested the S&P 500 may extend the 0.1 percent gain on Feb. 26. Billionaire Warren Buffett, writing in a Feb. 27 letter to investors, said the U.S. residential real estate slump will end by about 2011.
The MSCI Emerging Markets Index headed for its biggest two- day advance since Jan. 5 as gains by commodity producers lifted Russia’s Micex Index 1.6 percent.
Turkey’s ISE National 100 Index jumped 2 percent and the lira strengthened for the first time in three days on speculation tension between the military and the government is easing after the release of eight officers questioned in an investigation into allegations of a 2003 coup plot against Prime Minister Recep Tayyip Erdogan’s government.
Yen Weakens
The yen weakened against higher-yielding currencies including South Africa’s rand and the Australian dollar. The Japanese currency depreciated 0.5 percent to 121.81 per euro, and fell 0.4 percent to 89.29 versus the dollar.
The pound tumbled to an almost 10-month low against the dollar after polls indicated the election due by June 10 may produce the first minority government since 1974, which would hamper efforts to cut the record deficit. Sterling dropped 0.6 percent to $1.5143 after sliding to $1.5097, the lowest level since May 14. The U.K. currency fell against all 16 of its most- traded counterparts, weakening 0.7 percent to 90.09 pence per euro.
U.K. gilts, U.S. Treasuries and German bonds declined. The yield on the 10-year gilt rose 4 basis points to 4.07 percent, and the similar maturity German bund yield climbed 2 basis points to 3.12 percent. The 10-year Treasury yield advanced 2 basis points to 3.63 percent.
--With assistance from Daniel Tilles, Gavin Serkin, Paul Armstrong, David Merritt, Anna Stablum and Anchalee Worrachate in London. Editors: Paul Sillitoe, Mark Gilbert
To contact the reporter for this story: Stuart Wallace in London at swallace6@bloomberg.net
To contact the editor responsible for this story: Paul Sillitoe at +44 20-7073-3857 or psillitoe@bloomberg.net
