By Michael Shanahan - Dec 21, 2011 6:50 PM GMT+0700
Italian 10-year bonds fell, the euro pared gains and stocks advanced after the European Central Bank said the region’s banks took 489 billion euros ($645 billion) in three-year loans, almost double the amount forecast by economists. U.S. index futures climbed.
Italian yields climbed 27 basis points to 6.84 percent and Spanish bond yields increased 16 basis points to 5.19 percent. The euro was little changed at $1.3098 after appreciating to $1.3175. The MSCI All Country World Index of stocks added 0.3 percent at 11:40 a.m. in London, after earlier gaining 0.8 percent. Standard & Poor’s 500 Index futures increased 0.2 percent, after the stock gauge rallied 3 percent yesterday.
The ECB flooded euro-area lenders with cash as they took up the central bank’s offer of three-year loans as part of its latest attempt to keep credit flowing during the sovereign debt crisis. Economists forecast banks would seek 293 billion euros, according to the median of 14 estimates in a Bloomberg News survey. U.S. data today may show sales of previously owned homes rose in November, after a report yesterday showed housing starts jumped to a 19-month high.
“Whether the auction will help to restore confidence in sovereign borrowers in the euro zone remains to be seen,” Christian Schulz, senior economist at Berenberg Bank AG in London, wrote in a note. “Small banks may be tempted to invest the proceeds of the auction into sovereign bonds, profiting from the huge interest rate differentials. Large banks however, may be much more reluctant and resist pressure to do so.”
The Stoxx Europe 600 Index gained 1 percent, extending yesterday’s 2 percent jump. A measure of banks led the advance, rising 2.4 percent, as Lloyds Banking Group Plc and Barclays Plc climbed more than 3 percent.
Italian banks limited gains in the wider index, with UniCredit SpA and Banca Popolare di Sondrio Scrl dropping at least 1.4 percent.
Sovereign Risk
The cost of insuring against default on sovereign debt fell to the lowest in two weeks, with the Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments declining six basis points to 355.5 basis points.
The gain in S&P 500 (SPX) futures indicated the U.S. stocks measure will extend yesterday’s jump, the biggest gain this month. Sales of previously owned homes in the U.S. probably rose to a 5.05 million annual rate in November from 4.97 million the previous month, economists surveyed by Bloomberg predicted before a report today.
Research In Motion Ltd. advanced 9.8 percent in German trading after the Wall Street Journal said that Microsoft Corp. and Nokia Oyj considered a joint bid for the maker of the BlackBerry smart phone, while Reuters reported that Amazon.com Inc. also considered buying the company. Oracle Corp. (ORCL) dropped 6.5 percent after the second-largest software maker reported sales and profit that missed analysts’ estimates, hurt by slower demand for databases, applications and computer servers.
‘Structural Impediments’
“The U.S. is showing it’s fairly robust in terms of not being dragged down to the extent of European economies, but there remain significant structural impediments,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “There will be significant gains today. The question is, given we are coming into a holiday period, how sustainable those gains are going to be over the next week or so.”
The Dollar Index (DXY), which tracks the U.S. currency against those of six trading partners, slipped 0.3 percent.
The MSCI Emerging Markets Index (MXEF) rose 2.25 percent. Taiwan’s Taiex Index (TWSE) rallied 4.6 percent, the most since May 2009, after the government said it would allow a state-run fund to buy stocks. South Korea’s Kospi Index (KOSPI) advanced 3.1 percent and the won strengthened 1.3 percent against the dollar, erasing losses earlier in the week sparked by the death of North Korean leader Kim Jong-il. The Australian dollar increased 1.1 percent.
Shanghai Stocks
China’s Shanghai Composite Index (SHCOMP) retreated 1.1 percent, its third consecutive decline, as a gauge of funding availability in the financial system rose, signaling banks were hoarding cash.
The S&P GSCI index of 24 commodities was 0.4 percent higher. Oil in New York jumped 0.5 percent to $97.68 a barrel. Copper climbed 1.1 percent to $7,489 a metric ton and zinc increased 1 percent to $1,886 a ton.
The industry-funded American Petroleum Institute said crude inventories declined 4.57 million barrels last week. An Energy Department report today may show supplies fell 2.13 million barrels, according to a Bloomberg News survey.
To contact the reporter on this story: Michael Shanahan at mshanahan3@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
Posts
No comments:
Post a Comment