European Stock-Index Futures Advance; Michelin, BP May Climb

By Adria Cimino

June 26 (Bloomberg) -- European stock futures rose, indicating the Dow Jones Stoxx 600 Index will trim its second straight weekly decline. Asian stocks advanced, while U.S. futures slipped.

Michelin & Cie. may climb after Bridgestone Corp., the world’s largest tiremaker, narrowed its loss forecast. U.S.- traded shares of BP Plc, Europe’s second-biggest oil company, increased as crude rose. UBS AG, the European bank with the steepest credit-crisis losses, may be active after raising $3.5 billion in a share sale.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, added 0.7 percent to 2,416 at 7:13 a.m. in London. The U.K.’s FTSE 100 Index may increase 27, according to Cantor Index, a betting firm.

A rally by Bridgestone helped send the MSCI Asia Pacific Index up 1.3 percent, extending the gauge’s weekly gain to 1.6 percent.

Futures on the Standard & Poor’s 500 Index slipped 0.3 percent. U.S. stocks advanced the most in three weeks yesterday as investors bet that Ben S. Bernanke’s defense of emergency measures to rescue Merrill Lynch & Co. bolstered his chances of remaining Federal Reserve chairman.

Europe’s Stoxx 600 has lost 1.7 percent this week, heading for its first back-to-back weekly declines since the start of a three-month rebound in March. The World Bank predicted the global recession will be deeper this year than it forecast in March, while European Central Bank council member Axel Weber said the bank has used up its room to cut interest rates.

‘Green Shoots’

“There are doubts over the sustainability of these green shoots of recovery we keep hearing about,” Matthew Buckland, a dealer at CMC Markets in London, wrote. “The fact that oil has broken back above the $70 mark may offer some support for the petrochemicals sector.”

The Stoxx 600 has lost 4.7 percent since June 11 amid speculation share prices have outpaced the outlook for economic growth after a three-month, 36 percent rally drove valuations to 25.4 times earnings, the highest level since 2004.

Michelin, the world’s second-biggest tiremaker, and Continental AG, Europe’s second-largest auto-parts maker, may climb. Bridgestone narrowed its first-half net loss forecast to 46 billion yen ($480 million) from 62 billion yen, citing reduced costs. Bridgestone climbed 8.5 percent in Tokyo.

American depositary receipts of BP added 1.3 percent from the stock’s close in London. ADRs of StatoilHydro ASA, Norway’s biggest oil and gas producer, advanced 1 percent.

Crude oil rose for a second day, exceeding $70 a barrel. The contract for August delivery gained as much as 0.8 percent on the New York Mercantile Exchange.

UBS may be active. The Zurich-based lender raised about 3.8 billion Swiss francs ($3.5 billion) by selling shares to boost capital and said it expects a second-quarter loss.

Deutsche Bank AG, Germany’s biggest bank, was upgraded to “buy” from “neutral” at UBS.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

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Forex Market Update: Strong Equity Rally Puts USD Back On The Defensive As Another Day Sees Yet Another Direction Change

Daily Forex Fundamentals | Written by Saxo Bank | Jun 26 09 06:54 GMT |

Bonds also rally, keeping JPY crosses relatively contained despite strong risk appetite HEADLINES - PREVIOUS SESSION New Zealand Q1 GDP fell -1.0% QoQ vs. -0.7% expected Japan May CPI fell -1.1% YoY and fell -1.1% ex Fresh Food vs. -1.0%/-1.1% expected, respectively THEMES TO WATCH - UPCOMING SESSION Germany May Import Price Index (0600) Sweden May Trade Balance (0730) Switzerland Jun. KOF Swiss Leading Indicator (0930) US May Personal Income and Spending (1230) US May PCE Core (1230) US Jun. Final University of Michigan Confidence (1400) US Fed's Fisher to Speak about US Economy (1700) Market Comments Equities rallied strongly into the North American close and knocked the USD well back from the strongest levels it posted after the FOMC meeting. The final auction of the week - this time for $27 billion of 7-year notes - from the US treasury saw heavy bidding and interest rates also headed lower. We'll refrain somewhat from the usual picking apart of the intermarket movements, as behavior has diverged sharply from past patterns and it feels like the markets are a bit chaotic here and scrambling for a new toehold on what is going on. For the shortest term, the USD weakening today may have simply been an unwinding of USD buying in the wake of the FOMC meeting and we're back to square one. Looking at the charts, the dollar index has gone into hibernation for almost three weeks now since the lows below 80.00 were rejected about a month ago. The equity rally came at a key technical pivot point today, as technicals were looking ominous for major indices like the S&P500 and its flirtation with the 200-day moving average and recent lows. This allowed FX to continue the range trading as well and prevent any further directional signals from developing. The strong rally in bonds after the US auction (and reversing the kneejerk sell-off induced by the Fed's lack of new debt buying announcements on Wednesday) was constructive for the Japanese Yen, but the risk appetite in evidence elsewhere confused the picture and instead, the JPY eased a bit lower on the day, though it did gain vs. the greenback. Japan's ex Fresh Food year-on-year CPI measure registered the lowest reading in the 38-year history of the series. The Fed's Bernanke faced a very tough panel of House interrogators yesterday on his actions related to the Bank of America/Merrill Lynch deal, who are trying to score political points for their constituencies. The questioning session was quite a spectacle, as some representatives' questioning techniques and tone bordered on lack of respect at times. Mr. Bernanke bore himself with dignity and did not appear as testy or indignant as the situation certainly justified. It is interesting to note, as a few articles pointed out, that Fed criticism is actually intense from both sides of the aisle - from the Republican minority which is aghast at the level to which the government and the Fed have intervened in the economy, and from the left, which is aghast at bankers' continuing to make hay regardless of the weather. It will be interesting to see how Bernanke's star fares as we head towards his potential January renomination. If the economy continues to sour between now and then, every political leader will be looking for a scapegoat. New Zealand suffered worse than expected contraction in its GDP in Q1, and the vastly stronger kiwi probably isn't doing much to help out the situation in Q2. Shouldn't the kiwi rally be tiring here? We're scanning the calendar in vain for catalysts today. Next week will hopefully provide sufficient impetus for pushing the market action out of these mind-numbing ranges. The ECB and the US employment report are putting in a rare appearance on the same day Thursday next week as US markets have a holiday-shortened week due to the Independence Day holiday. Analysis Disclosure & Disclaimer SaxBank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by SaxBank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis dnot occur as anticipated. SaxBank utilizes financial information providers and information from such providers may form the basis for an analysis. SaxBank accepts nresponsibility for the accuracy or completeness of any information herein contained. Any recommendations and other comments in SaxBanks analysis derive from objective fundamental macreconomical and company specific calculations, statistical and technical analysis, and subjective general market assessment. If an analysis contains recommendations tbuy or sell a specific financial instrument, such recommendation should be seen as SaxBanks opinion that the specific instrument will respectively outperform the relevant market or underperform compared tthe market. SaxBanks recommendations should statistically correspond tan even distribution between buy and sell recommendations. The recommendations may expire promptly due tmarket volatility and in general, SaxBank does not anticipate its recommendations tbe valid more than one month. An analysis will be updated if and only if a market development or other issues relevant tthe analysis render a new analysis on the same topic relevant. SaxBanks analysis does not cover any specific financial product over time but only products which SaxBanks strategy team finds it important tcover at any given point in time. In order tprevent conflicts of interest, SaxBank has established appropriate business procedures, incl. procedures applicable tresearch and analysis tensure objective research reports. SaxBanks research reports have not been discussed with the parties, e.g. issuers of securities, mentioned in the analysis. SaxBank is under supervision by the Danish Financial Supervisory Authority. SaxBank does not engage in corporate finance activities and accordingly, SaxBanks employees, incl. the persons responsible for an analysis, dnot receive remuneration associated with investment banking transactions.

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Forex Technical Update

Daily Forex Technicals | Written by India Forex | Jun 26 09 07:04 GMT |

Rupee : The markets are currently holding slightly bearish bias . Breaking of 48.90 on the upside would confirmation of further weakness towards 49.50 and 49.95 . On the downside 48.00 levels is holding support. Despite late monsoons if the rupee maintains bullishness day after day and breaks 48.00 then we need to reconsider bearishness. (USD/INR : 48.55) Euro :Euro had broken the falling trend to the upside but again fell drastically yesterday after FOMC rate decision. The bias again stays neutral to downside. Break of 1.3800 or 1.4100 would determine the clear trend. (Eur/Usd:1.4040). Neutral Sterling :Cable made a kind of double top formation at 1.66 levels and still moving in quite a volatile fashion in last 14 days showing both sides movement. of 250-300 pips . Important support holds at 1.6200 levels breaking which we could see extreme bearishness. View needs to be reconsidered only if 1.6650 breaks.(Gbp/Usd: 1.6420). Very Range bound Yen :Dollar-Yen pair is trading sideways confined between the cluster support of 94 levels and resistance of 99.55. We should not initiate positions until this wide range breaks on either side. The bias is towards yen strength and dollar weakness due to increased risk aversion again. (USD/JPY : 95.83) Rangebound Australian Dollar :Aussie stays below trendline. Remain bearish overall below .8050. 2 closings above .8100 would negate the view.(Aud/Usd: 0.8045).Neutral Gold :Gold rose quite a bit after FOMC decision . The view stays neutral as of now. (Gold- $941.66). Neutral Dollar Index :Dollar index extends the rebound from 79.56 and is set to take on 80.94. We're anticipating a break of 80.94 resistance to signal resumption of rise from 78.33, to be confirmed by break of 81.36/47 resistance zone. Further rally should be seen to next key resistance at 82.62 (38.2% retracement of 89.62 to 78.93 at 82.64). in such case.. (DI- 80.45) Bullish India Forex http://www.indiaforex.in DISCLAIMER These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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Wakeup Call: Markets Fueled By Liquidity Injection From ECB And Prolonging Of Credit Facilities By FED

Daily Forex Fundamentals | Written by Saxo Bank | Jun 26 09 06:49 GMT |

The injection of cheap liquidity from ECB and the prolonging of credit facilities by FED will make markets trade higher in the short run. Calendar Economic Data Releases Country Name Time (GMT) Expectation Prior Comment US 12:30 Personal Income MoM (MAY) 0.3% 0.5% US 12:30 Personal Spending MoM (MAY) 0.3% -0.1% US 14:00 Consumer Confidence (JUN) 69.0 69.0 What's going on? The US GDP figures were generally as expected, but Jobless Claims were disappointing. The Fed yesterday released a press statement that it would prolong (to 2010) and change some of its credit providing facilities in order to ensure easy credit conditions to households and financial markets. This statement led to a general lift-off in all asset classes (including treasuries) – but the USD was down. Combined with the cheap EUR 442B credit expansion from the ECB earlier this week, we believe that the Fed’s initiative should stimulate to even more risk-taking today and possibly into next week. Buy on dips into next week. Watch out for the PCE figures today. We believe that they could be lower than expectations, lifting bonds higher. FX FX Daily stance Comment EURUSD 0/- EURUSD stalling around 1.4045 and expected to fall towards 1.4000. EURJPY 0/- Can look to trade narrow range as EURJPY expected to converge towards 134.50. USDJPY 0 Uptrend support line expected to support USDJPY around 95.60, buy looking for 96.60. GBPUSD 0/- Heard of large buying of EURGBP, pushing cable lower, expect further weakness towards 1.6280. AUDUSD 0/- Offered throughout Asia session, still looks heavy and we are looking for a test of 0.8000 support. Equities Equities Daily stance Comment DAX 0/+ Buy towards 4829 targeting 4878. S/L below 4800. FTSE 0/+ Buy towards 4274 targeting 4311. S/L below 4250. S&P500 0/+ Buy towards 915 targeting 922. S/L below 908. Nasdaq100 0/+ Buy towards 1473 targeting 1490. S/L below 1466. Nikkei 0/+ Futures Commodities Daily Stance Comment Gold 0/+ Buy at the break of 944 and target 960. Stop below 937. Silver 0/+ Buy at the break of 14.25 and target 14.60. Stop below 14.05. Oil 0/+ Buy on dips towards 70.50 and target 72. Stop below 70 FX Options FX-Options Comment EURUSD vols sold heavily today, and frontend interests all abt EUR puts. 1.37 and 1.38 for early next week among the biggest interests. Vols were at a relatively high level and this off is not unexpected, and our 1-3mo view is still that EURUSD will trade higher, but we will likely see a small correction the next few days. Analysis Disclosure & Disclaimer Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated. Saxo Bank utilizes financial information providers and information from such providers may form the basis for an analysis. Saxo Bank accepts no responsibility for the accuracy or completeness of any information herein contained. Any recommendations and other comments in Saxo Bank's analysis derive from objective fundamental macro economical and company specific calculations, statistical and technical analysis, and subjective general market assessment. If an analysis contains recommendations to buy or sell a specific financial instrument, such recommendation should be seen as Saxo Bank's opinion that the specific instrument will respectively outperform the relevant market or underperform compared to the market. Saxo Bank's recommendations should statistically correspond to an even distribution between buy and sell recommendations. The recommendations may expire promptly due to market volatility and in general, Saxo Bank does not anticipate its recommendations to be valid more than one month. An analysis will be updated if and only if a market development or other issues relevant to the analysis render a new analysis on the same topic relevant. Saxo Bank's analysis does not cover any specific financial product over time but only products which Saxo Bank's strategy team finds it important to cover at any given point in time. In order to prevent conflicts of interest, Saxo Bank has established appropriate business procedures, incl. procedures applicable to research and analysis to ensure objective research reports. Saxo Bank's research reports have not been discussed with the parties, e.g. issuers of securities, mentioned in the analysis. Saxo Bank is under supervision by the Danish Financial Supervisory Authority. Saxo Bank does not engage in corporate finance activities and accordingly, Saxo Bank's employees, incl. the persons responsible for an analysis, do not receive remuneration associated with investment banking transactions.

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Forex Technical Analytics

Daily Forex Technicals | Written by FOREX Ltd | Jun 26 09 07:00 GMT |

CHF The pre-planned long positions from key supports were implemented with the overlap of minimal estimated target. OsMA trend indicator having marked uncertainty of bullish activity level as a direction priority of the previous day and gives grounds to suppose further rate correction period to channel line '1' at 1,0840/60 levels where it is recommended to evaluate the development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term buying positions on condition of the formation of topping signals the targets will be 1,0900/20, 1,0960/80, 1,1020/40 and (or) further break-out variant up to 1,1080/1,1100, 1,1160/80, 1,1240/60. The alternative for sales will be below 1,0780 with the targets of 1,0720/40, 1,0640/60, 1,0580/1,0600. GBP The pre-planned break-out variant for sales has been implemented with the achievement of minimal estimated targets. OsMA trend indicator, having marked relative activity rise of both parties, except the risk of technical outlook change favouring to one of the parties, does not clarify the choice of planning priorities for today. Hence and considering slight bearish priority we can suppose probability of rate return to 1,6260/1,6300 supports where it is recommended to evaluate development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term buying positions on condition of formation of topping signals the targets will be 1,6360/80, 1,6440/60, 1,6500/40 and (or) further break-out variant up to 1,6580/1,6600, 1,6660/80, 1,6740/60.The alternative for sales will be below 1,6160 with the targets of 1,6080/1,6100, 1,5980/1,6020, 1,5800/40. JPY Short positions opened and preserved earlier had positive result in the achievement of minimal estimated target. OsMA trend indicator, having marked the preservation of activity parity of both parties with rate positions within Ichimoku cloud border does not clarify the choice of planning priorities for today. Hence and considering ascending direction of indicator chart we can assume probability of another test of channel line '1' at 96,20/40 levels, where it is recommended to evaluate development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term sales on condition of the formation of topping signals the targets will be 95,40/60, 94,80/95,00 and (or) further break-out variant up to 94,20/40, 93,60/80. The alternative for buyers will be above 96,80 with the targets of 97,20/40, 97,80/98,00, 98,40/60. EUR The estimated test of key resistance range levels for the implementation of pre-planned short positions has not been confirmed exactly and further developments with bullish activity level enforcement gives grounds to suppose rate rise but without clarifying the choice of planning priorities for today. On the assumption of it we can assume probability of rate return to close 1,3980/1,4000 supports where it is recommended to evaluate the development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term buying positions on condition of the formation of topping signals the targets will be 1,4040/60, 1,4100/20, 1,4180/1,4200 and (or) further break-out variant up to 1,4240/60, 1,4300/20. The alternative for sales will be below 1,3880 with the targets of 1,3820/40, 1,3760/80, 1,3680/1,3700. FOREX Ltd www.forexltd.co.uk

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FX Technical Analysis

Daily Forex Technicals | Written by Mizuho Corporate Bank | Jun 26 09 06:18 GMT |

EURUSD Comment: Tricky as prices remain within the 1.3800 to 1.4100 range that has held most of the time since May. We continue to feel we are preparing to break out of recent ranges, the best examples currently AUD and NZD. Strategy: Attempt longs at 1.4030; stop below 1.3800. Short term target 1.4100, then 1.4200. Direction of Trade: →↗ Chart Levels: Support Resistance 1.3982 " 1.4062 1.3888 1.4109 1.385 1.4139 1.3826 1.4178 1.38 1.423 GBPUSD Comment: Pushing towards the apex of the 'triangle/pennant' and moving averages suggest a long position. The pound is not in the slightest bit overbought and bullish momentum is among the strongest in years. A weekly close above 1.6600 is needed to take bullish momentum back up to the very strong levels of early June. Strategy: Attempt small longs at 1.6390/1.6300; stop below 1.6080. First target 1.6500, then 1.6600. Direction of Trade: →↗ Chart Levels: Support Resistance 1.6368 " 1.6474 1.6231 1.6507 1.6209 1.6562 1.6187 1.6622 1.612 1.6664* USDJPY Comment: Retreating smartly from the lower edge of the Ichimoku 'cloud' to form a 'spike high' candle against the moving averages. This has added to bearish momentum and the US dollar is not oversold. Probably not today, but maybe next week, we favour a test of the pivotal 94.00 area. Strategy: Sell at 95.85/96.00; stop well above 96.65. First target 95.50, then 95.00 and more. Direction of Trade: →↘ Chart Levels: Support Resistance 95.62 " 96.07 95.5 96.58 95 96.80* 94.88 97.27* 94.44 97.65 EURJPY Comment: Holding above trendline support, rather better than expected though well below this year's high. Expect more consolidation today. Strategy: Possibly attempt small shorts at 134.60; stop above 135.50. Short term target 133.00, then 132.00. Direction of Trade: → Chart Levels: Support Resistance 134.10 " 134.82 133 135 132.35 135.38/135.50* 131.8 136 131.41* 137.35 Mizuho Corporate Bank Disclaimer The information contained in this paper is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this paper are subject to change without notice. This paper has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy.

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Japan Aluminum Shipments Drop at Slower Pace in May

By Aya Takada

June 26 (Bloomberg) -- Japan’s shipments of aluminum rolled products dropped at a slower pace in May than in April as demand from beverage can producers and carmakers increased on month.

Supplies to the domestic and export markets declined 30 percent to 138,503 metric tons from 196,842 tons a year earlier, the Japan Aluminium Association said in a statement today. The pace of decrease slowed for a third month after starting to drop in October. Shipments plunged 39 percent in February, the worst slump in 34 years, tumbled 36 percent in March and fell 31 percent in April.

Japan’s government and central bank raised their assessments of the economy for a second month in June after industrial output advanced at the fastest pace in 56 years and exports improved. Bank of Japan Governor Masaaki Shirakawa said June 16 he is “cautious” about the rebound because renewed demand may only be temporary.

“Shipments in May were supported by good sales to can makers and improvement in demand from the auto sector,” Koji Iida, an association spokesman, said in Tokyo today.

Shipments to the car industry dropped 50 percent from a year earlier to 13,024 tons in May as the pace of contraction moderated for a second month. The volume increased 23 percent from April, when shipments fell 62 percent to 10,590 tons.

Demand from can producers, the largest consumers of aluminum rolled products in Japan, climbed 4.5 percent to 42,065 tons in May from a year earlier as individuals stayed at home and drank more beer and other canned beverages amid the recession, Iida said.

Members of the Japan Aluminium Association include Furukawa-Sky Aluminum Corp., Kobe Steel Ltd. and Nippon Light Metal Co. Details of output, shipments and inventories for May are as follow:

==============================================================

May ‘09 April ‘09 May/April May Y/Y

==============================================================

(%) (%)

OUTPUT 139,723 137,442 +1.7 -28.7

Flat-rolled 90,177 85,244 +5.8 -26.5

Extruded 49,546 52,198 -5.1 -32.5

SHIPMENTS 138,503 137,718 +0.6 -29.6

Flat-rolled 89,486 86,159 +3.9 -27.7

Extruded 49,017 51,559 -4.9 -33.0

INVENTORY 80,529 79,219 +1.7 +1.8

Flat-rolled 68,862 68,048 +1.2 +1.1

Extruded 11,667 11,171 +4.4 +6.1

===========================================================

To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net

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S. African Mines Ministry Met With Xstrata Officials, Anglo CEO

By Antony Sguazzin

June 26 (Bloomberg) -- Sandile Nogxina, the director general of South Africa’s mines department, met separately yesterday with a delegation of officials from Xstrata Plc and Cynthia Carroll, the chief executive officer of Anglo American Plc.

Nogxina, whose department is overseen by the mines ministry, didn’t meet Xstrata’s CEO, Mick Davis, said Jeremy Michaels, a spokesman for the department. The ministry still wants more “clarity” on any proposed transaction, he said.

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Benxi Steel Plans to Join in Exploration of Iron Ore Deposit

By Bloomberg News

June 26 (Bloomberg) -- Benxi Iron & Steel Group plans to join in the exploration and development work on an iron ore deposit, touted as Asia’s largest, in China’s Liaoning province.

The group hasn’t obtained exploration or mining rights for the discovery, located 20 kilometers (12.4 miles) from the company in Benxi, listed unit Bengang Steel Plates Co., said today in a statement to the Shenzhen stock exchange. The group can’t verify claims that the deposit has reserves of more than 3 billion metric tons, it said in the statement.

China, the biggest buyer of iron ore, wants to lift domestic output to reduce imports from Vale SA, Rio Tinto Group and BHP Billiton Ltd. The Dataigou find in the northeastern Chinese province is deeper than any domestic mines in production, according to Zou Jian, a consultant and former chairman of the China Metallurgical Mining Enterprise Association.

“It would take at least a few years for the deposit to start production,” said Zhu Limin, an analyst with Shanghai Securities Co. “The deposit is too deep underground to be an ideal mine resource for the mills.”

The Benxi local government this week announced the find after an exploration team drilled 17 holes in the area. The deposit may have 3 billion tons of iron ore, and material was found from 1.2 kilometers below ground to 2.015 kilometers, it said in a statement.

Angang Steel

Anshan Iron & Steel Group and listed unit Angang Steel Co. haven’t considered exploring or investing in the deposit, the unit said yesterday in a statement. Anshan and Benxi could be given the right to develop the project, the Guangzhou Daily reported yesterday.

Separately, Bengang Steel also said it may have a first- half net loss of 400 million yuan ($59 million) to 900 million yuan. The shares jumped 9.2 percent to 8.17 yuan today in Shenzhen at 11:29 a.m. local time.

“The forecast interim loss is in line within market expectations,” said Zhu. “Bengang surged today because it’s cheaper than many other mills.”

The stock has almost doubled this year, lagging behind the 139 percent gain in rival Xinjiang Ba Yi Iron & Steel Co. Gansu Jiu Steel Group Hongxing Iron & Steel Co. almost tripled this year.

Chinese steel stocks have surged this year on optimism the nation’s stimulus spending plan will revive demand and prices.

--Helen Yuan. Editors: Tan Hwee Ann, Ang Bee Lin

To contact the Bloomberg News staff on this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

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Oil Rises a Second Day on Equity Gains, Shell Pipeline Attack

By Christian Schmollinger and Ben Sharples

June 26 (Bloomberg) -- Crude oil rose for a second day, exceeding $70 a barrel, as Asian equities extended a global stock-market rally, raising expectations of fuel demand growth.

The MSCI Asia Pacific Index gained 1 percent, adding to increases in the Dow Jones Industrial Average and the Standard & Poor’s 500 yesterday. The dollar fell, set for a weekly loss against the euro. Militants said yesterday they attacked a Royal Dutch Shell Plc pipeline supplying an export terminal in Nigeria, Africa’s largest producer.

“We’ve really got the right mix of a couple of factors,” said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore. “Asian equities are up. The dollar weakened yesterday on top of the attack in Nigeria disrupting the Shell pipeline supply.”

Crude oil for August delivery rose as much as 54 cents, or 0.8 percent, to $70.77 a barrel in electronic trading on the New York Mercantile Exchange. It was at $70.66 a barrel at 12:31 p.m. Singapore time.

“The factor supporting oil is the situation in Nigeria,” said David Moore, a commodity strategist with Commonwealth Bank of Australia Ltd. in Sydney. “It seems to have intensified and it’s something that’s helping keep prices at a higher level.”

Yesterday, the contract rose $1.56, or 2.3 percent, to settle at $70.23 a barrel. Oil has gained 1.5 percent this week after falling 3.5 percent last week.

‘Buying Support’

The MSCI Asia Pacific Index gained 1 percent to 102.81 as of 12:37 p.m. in Tokyo, taking its advance this week to 1.3 percent. Japan’s Nikkei 225 Stock Average added 0.5 percent.

The Standard & Poor’s 500 Index yesterday gained 2.1 percent to 920.26 and the Dow Jones Industrial Average rose 2.1 percent to 8,472.40 as investors were buoyed by Federal Reserve Chairman Ben S. Bernanke’s performance before the House Oversight Committee.

“It seems when the oil price dips into that high $60s it does attract buying support which has helped keep it there,” Moore said. “It is providing something of a short-term base to the oil price.”

Brent crude oil for August settlement rose as much as 42 cents, or 0.6 percent, to $70.20 a barrel on London’s ICE Futures Europe exchange. It increased $1.45, or 2.1 percent, to end yesterday’s session at $69.78 a barrel.

A falling dollar makes raw materials such as oil and gold an attractive alternative investment. The dollar traded at $1.4047 versus the euro at 12:48 p.m. in Singapore, following a 0.4 percent decline yesterday.

Nigerian Attack

Oil prices have been supported and supply curbed since December 2005 because of militant activity in the Niger River delta, Nigeria’s main oil-producing region. MEND has stepped up a sabotage campaign in the area since a military offensive began last month.

Fighters from the Nigerian group damaged the Bille-Krakrama pipeline, cutting supplies from Shell’s Cawthorne 1, 2 and 3 oil-pumping stations, MEND spokesman Jomo Gbomo said in an e- mail yesterday. A Shell spokeswoman confirmed an attack on a manifold on the pipeline and couldn’t say whether production was halted by the incident.

Nigeria produces so-called sweet, or low-sulfur, crude oil that is prized by refiners because yields a large amount of gasoline and diesel fuel when processed.

Gasoline for July delivery increased 0.16 cent, or 0.1 percent, to $1.8999 a gallon at 12:06 p.m. in Singapore. Yesterday, it gained 5.58 cents, or 3 percent, to end the session at $1.8983 a gallon.

Exxon Mobil Corp. shut a fluid catalytic cracker at the Baytown, Texas, refinery, the largest in the U.S., late yesterday, according to a union official.

The gasoline-making unit was taken down after the loss of a cooling tower, said the official. Other units related to the cooling tower are operating at reduced rates, the official said.

Refiners may have less incentive to produce gasoline as the so-called crack spread, or profit margin, between the motor fuel and crude oil has declined. The price difference has slid to $9.28 a barrel today, down 44 percent from $16.52 a barrel on June 16.

To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Christian Schmollinger in Singapore at christian.s@bloomberg.net

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