By Adam Haigh
Sept. 16 (Bloomberg) -- Stocks in Europe and Asia advanced as billionaire investor Warren Buffett said his company is buying equities and higher commodity prices lifted raw-material producers. U.S. futures gained.
BHP Billiton Ltd., the world’s biggest mining company, increased 2.7 percent as copper, lead and nickel climbed on the London Metal Exchange. KBC Group NV surged 6.9 percent after Goldman Sachs Group Inc. advised buying shares of the Belgian bank. Inditex SA soared 4 percent after earnings at Europe’s largest clothing retailer beat analysts’ estimates.
The MSCI World Index added 0.9 percent at 11:57 a.m. in London as all 10 industry groups rose. The measure of equities in 23 developed nations has rallied 64 percent since March 9 as results at companies from Goldman Sachs to Roche Holding AG topped estimates and the German and French economies unexpectedly exited recessions.
“There’s still the chance of the market going up some more from here as there are people who haven’t participated in this rally wanting to buy in,” said Gregor Smith, a London-based fund manager at Daiwa Asset Management, who helps oversee about $1 billion. “These guys are being forced in.”
Europe’s Dow Jones Stoxx 600 Index climbed 1.3 percent and the MSCI Asia Pacific Index surged 1.9 percent, the biggest gain in more than three weeks. Standard & Poor’s 500 Index futures expiring in December added 0.5 percent before a report that may show U.S. industrial production increased.
Bernanke, Buffett
Federal Reserve Chairman Ben Bernanke, who yesterday said the recession has likely ended, may have to accept a slow recovery and high unemployment as the price for defending his inflation-fighting credentials.
“Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time,” Bernanke said in response to questions after a speech at the Brookings Institution in Washington. “That’s a challenge for us and all policy makers going forward.”
Buffett told a conference in California yesterday that his Berkshire Hathaway Inc. is “buying stocks right as we speak” and he’s getting a “lot for my money” in equities.
Global stocks are in the middle of a “V-shaped recovery,” led by emerging markets, that will last for at least another six months, billionaire investor Kenneth Fisher said.
‘V-Shaped Recovery’
“The bigger and uglier the bear market, usually the bigger the V,” Fisher, who manages $28 billion as chief executive officer of Fisher Investments Inc. in Woodside, California, said in an interview in New York. “A normal V-shaped recovery lasts one year, and the current rally started in March.”
Former Fed Chairman Alan Greenspan said in a broadcast to Tokyo clients of Deutsche Bank Securities Inc. today that he’s concerned that lawmakers will hamper U.S. central bank efforts to rein in its monetary stimulus, and that inflation might “swamp” the bond market.
Reports today may show the Obama administration’s “cash- for-clunkers” plan rippled through the economy in August, helping to boost production and restrain prices, economists said. Industrial output probably climbed 0.6 percent last month as automakers cranked up assembly lines, according to the median of 75 projections in a Bloomberg News survey. The cost of living likely rose 0.3 percent, the survey showed, reflecting a jump in fuel costs that was offset in part by the government’s incentive to trade in older cars.
BHP, Rio Tinto
BHP Billiton added 2.7 percent to 1,753.5 pence in London. Copper climbed for a second day on the LME, rising 1.9 percent. Rio Tinto Group, the world’s third-largest mining company, gained 3.8 percent to 2,749 pence.
BHP Chief Commercial Officer Alberto Calderon told a presentation in London that the worst of the industry crisis is over but recovery may be “slower than envisioned.”
Gold producers rallied as the precious metal climbed to an 18-month high in London. Newcrest Mining Ltd., Australia’s largest gold producer, advanced 4.5 percent to A$34.95. Zijin Mining Group Co., China’s largest bullion producer, surged 7.8 percent to HK$8.15 in Hong Kong.
KBC advanced 6.9 percent to 34.40 euros. Goldman Sachs rated the shares “buy” in new coverage and placed them on its “conviction buy” list.
Inditex rose 4 percent to 40.17 euros. Net income fell 7.6 percent to 375 million euros ($550 million) in the six months through July, beating the 349.5 million-euro average estimate of six analysts compiled by Bloomberg.
Next Plc increased 4.5 percent to 1,775 pence. The U.K.’s second-biggest seller of clothing said it expects analysts to raise full-year profit estimates after saying first-half performance was stronger than the retailer expected.
Automakers Advance
Renault SA, France’s second-largest carmaker, led a rally in European automakers after Japanese affiliate Nissan Motor Co. said sales in China this year will beat its previous forecast as government stimulus measures spur demand. Renault gained 4.8 percent to 34.10 euros and PSA Peugeot Citroen, Europe’s second- biggest maker of cars, soared 4.1 to 22.38 euros.
Porsche SE, the maker of the 911 sports car, surged 4.4 percent to 52.75 euros.
Rolls-Royce Motor Cars Ltd., the highest-priced brand of Bayerische Motoren Werke AG, is counting on its new Ghost model to help the division double sales next year as the luxury-car market gradually revives, Chief Executive Officer Tom Purves said in an interview. BMW added 0.9 percent to 35.06 euros.
Adidas AG gained 6.4 percent to 35.87 euros and Puma AG climbed 3.2 percent to 226.94 euros after Morgan Stanley rated both sporting-goods makers “overweight” in new coverage, saying they will benefit from the growth of Chinese consumers.
Safran SA sank 3.9 percent to 12.39 euros after Credit Suisse Group AG cut the shares to “neutral” and Cheuvreux SA downgraded the stock to “underperform.” Both brokerages moved down from an “outperform” recommendations.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net
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