Stocks Rise on Aid Meeting as Won Drops After Kim’s Death

By Rob Verdonck - Dec 19, 2011 9:31 PM GMT+0700

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Dec. 19 (Bloomberg) -- Nick Maroutsos, co-founder of Sydney-based Kapstream Capital, talks about the impact of Europe's debt crisis on Asian markets and economies. Maroutsos speaks with Zeb Eckert on Bloomberg Television's "First Up." (Source: Bloomberg)

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Dec. 19 (Bloomberg) -- Thomas Murphy, managing partner at private wealth-management firm Family Office Research & Management Ltd. in Sydney, talks about China's economy, central bank monetary policy and stock market. Murphy also discusses Europe's sovereign debt crisis and its implications for the region's banking industry. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

Stocks rose as Europe sought to draw additional financial support for its debt crisis. The won weakened to a two-month low after North Korean leader Kim Jong Il died.

The Standard & Poor’s 500 Index advanced 0.2 percent and the Stoxx Europe 600 Index gained 0.6 percent at 9:30 a.m. in New York. The MSCI Asia Pacific Index slid 1.7 percent as South Korea’s Kospi index slumped 3.4 percent. The won fell against all 16 major peers. The yield on the French 10-year bond climbed six basis points and the German bund yield increased three basis points. Spanish and Italian bonds rallied.

Euro-area finance ministers are seeking to meet a self- imposed deadline for drawing additional aid to the debt crisis through the International Monetary Fund. France sold 7 billion euros ($9.1 billion) of bills after Fitch Ratings last week reduced its outlook for the nation’s credit grade to negative from stable. Kim died on Dec. 17 of exhaustion brought on by a sudden illness, the official Korean Central News Agency said.

“The ratings agencies have obviously come out and said what they think, but on the other hand there’s the discussion about putting some more money into the IMF,” said Andy Lynch, a portfolio manager at Schroder Investment Management Ltd., which oversees $284 billion.

The Stoxx 600 rose following two straight weekly losses, paring this year’s drop to less than 15 percent. Suedzucker AG, a maker of sugar, starch and bakery additives, climbed 5.7 percent after Goldman Sachs Group Inc. recommended the shares.

10-Year Treasuries

The S&P 500 climbed for a third day. The 10-year Treasury yield rose one basis point to 1.86 percent before the U.S. auctions $35 billion of two-year notes, the first of three sales this week totaling $99 billion. The dollar strengthened against 10 of its 16 most actively traded peers.

U.S. online spending for the holiday season has jumped 15 percent to $30.9 billion from a year earlier, ComScore Inc. said. Consumer purchases probably rose 0.3 percent in November after increasing 0.1 percent in October, according to the median forecast of 62 economists surveyed by Bloomberg before Commerce Department figures scheduled for Dec. 23.

The MSCI Emerging Markets Index (MXEF) dropped 1.3 percent, set for the lowest closing level in three weeks. The Shanghai Composite Index (SHCOMP) lost 0.3 percent after new home prices in China dropped in 49 of 70 cities monitored by the government in November. The BSE India Sensitive Index (SENSEX) fell 0.7 percent, while Russia’s Micex Index rose 0.4 percent.

Won Weakens

South Korea’s won depreciated 1.4 percent to 1,174.80 per dollar, after declining to the weakest since Oct. 7. A government statement called on North Koreans to “loyally follow” Kim Jong Il’s son, Kim Jong Un.

European finance ministers hold a conference call at 3:30 p.m. Brussels time to discuss 200 billion euros of additional funding through the IMF.

French 10-year bonds snapped a four-day gain as yields increased six basis points to 3.11 percent. The Dutch 10-year yield climbed four basis points, with the yield on the similarly dated Finnish security also four basis points higher. Spain’s two-year note yields fell 17 basis points to 3.29 percent. They have dropped 163 basis points in the past seven trading days, the longest run of declines since October 2010.

Belgium’s 10-year yield jumped seven basis points after the nation’s credit ranking was cut two steps at the end of last week by Moody’s Investors Service.

Three-month copper dropped 0.2 percent to $7,329.75 a metric ton in London and nickel slipped 0.8 percent to $18,410 a ton. Oil rose 0.6 percent to $94.12 a barrel in New York.

To contact the reporter on this story: Rob Verdonck in London at rverdonck@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net