By Lynn Thomasson - Sep 16, 2011 2:12 PM GMT+0700
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Gold for immediate delivery has tumbled 4.6 percent this week, the biggest decline since the week ended May 6. Photographer: Ron D'Raine/Bloomberg
Sept. 15 (Bloomberg) -- Kirk Hartman, chief investment officer of Wells Capital Management in Los Angeles, talks about global financial markets and the U.S. economy. Hartman speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Sept. 16 (Bloomberg) -- Andrew Freris, senior investment strategist for Asia at BNP Paribas Wealth Management, talks about Greece's debt crisis and the potential impact on Asia. Freris speaks with Susan Li, Zeb Eckert and John Dawson on Bloomberg Television's "Asia Edge." (Source: Bloomberg)
Stocks rose, sending the MSCI All- Country World Index higher for a fourth day, amid speculation European policy makers may contain the region’s sovereign-debt crisis. Gold fell for a third day and the cost of protecting Asia-Pacific bonds from default declined.
The Euro Stoxx 50 Index gained 1 percent at 8:10 a.m. London time, while the MSCI Asia Pacific Index jumped 2 percent. Gold for immediate delivery sank 1.1 percent to $1,768.15 an ounce, poised for the biggest weekly loss in more than two years. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell to a one-week low. Copper increased 0.4 percent for a second day of gains.
Global equities have rebounded this week after the European Central Bank said yesterday it coordinated with other central banks to extend three-month loans to euro-area banks and German and French leaders expressed support for Greece to remain in the euro monetary union. The MSCI All-Country World has jumped 2.7 percent this week, set for the biggest gain in almost three months.
“There needs to be more coordinated action and I think markets are taking this very positively,” Kirk Hartman, who oversees $355 billion as the Los Angeles-based chief investment officer of Wells Capital Management, told Susan Li on Bloomberg Television’s “First Up.” “I don’t think we’re going to having a banking crisis, but I think we are going to have more turmoil. Clearly there are issues, but I think over time it will work itself out.”
Weekly Advance
European finance ministers are meeting in Wroclaw, Poland, today to discuss the euro-area crisis. Jean-Claude Trichet, president of the region’s central bank, said yesterday that the policymakers need to show the same “unity of purpose” as central banks did yesterday in providing extra dollars to European banks.
The euro fell 0.1 percent to 1.3857 per dollar today. The 17-nation currency is set for its first weekly gain against the yen in three weeks.
The MSCI All-Country World Index, which tracks equities in 45 developed and emerging markets, has lost 16 percent since its peak on May 2 amid concern global growth is slowing. Data today may show the Thomson Reuters/University of Michigan preliminary index of U.S. consumer sentiment rose to 57 in September from an almost three-year low of 55.7 the prior month, based on economist estimates tracked by Bloomberg.
Futures on the Standard & Poor’s 500 Index were little changed after the U.S. equity benchmark jumped 1.7 percent yesterday. Research In Motion Ltd. dropped in extended trading after U.S. exchanges closed yesterday. The maker of the BlackBerry smartphone missed analysts’ estimates for the second quarter on lower-than-expected sales of phones and the PlayBook tablet computer.
India Rates
The BSE India Sensitive Index gained 0.7 percent after the country’s central bank raised interest rates for the 12th time since the start of March 2010. The Reserve Bank of India increased the repurchase rate to 8.25 percent from 8 percent, breaking ranks among the so-called BRIC nations that have either cut or held borrowing costs as the global recovery falters.
About five stocks advanced for each one that fell in the MSCI Asia Pacific Index, which has declined 0.3 percent this week. Hong Kong’s Hang Seng Index (HSI) rose 1.8 percent, while the Shanghai Stock Exchange Composite Index was little changed.
Foreign direct investment in China climbed 11.1 percent in August from a year earlier, the Ministry of Commerce said in a statement on its website yesterday. That compares with a 19.8 percent expansion in July. Businesses are turning to China to bolster sales as rising unemployment and government indebtedness damp confidence in developed nations.
Esprit Holdings Ltd. (330), Hong Kong’s biggest listed clothing chain, plunged 20 percent and was headed for the biggest two-day drop since listing in 1993. At least seven brokerages downgraded the stock after the company said in a filing yesterday that the brand has “lost its soul.”
Gold, Copper
Gold for immediate delivery has tumbled 4.9 percent this week. December-delivery bullion in New York dropped 0.8 percent to $1,767.90. Silver for immediate delivery fell 1 percent to $39.44 an ounce.
Copper on the London Metal Exchange rose 0.6 percent to $8,765 a metric ton. Prices have fallen 0.7 percent this week, a second weekly drop. On Sept. 14, the metal touched $8,590, the lowest price since Aug. 11.
The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 6 basis points to 166, Credit Agricole CIB prices show. The Markit iTraxx Australia index dropped 5 basis points to 176 basis points, according to Credit Agricole. Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality.
Treasury 10-year note yields were poised for the biggest five-day advance in 11 weeks on optimism European leaders meeting today will step up efforts to halt the euro region’s debt crisis, damping demand for the safest assets. Ten-year yields rose 1 basis point to 2.09 percent today.
To contact the reporter on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
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