By Glenys Sim and Jonathan Burgos - Jun 15, 2012 9:55 AM GMT+0700
Asian stocks rose, poised for its biggest weekly gain in five months, and commodities climbed for a second day on expectations that central banks may increase measures to boost economies as Europe’s debt crisis hurts growth. Credit risk in the region fell and the dollar declined.
The MSCI Asia Pacific Index added 0.5 percent at 10:50 a.m. in Hong Kong, where the Hang Seng Index rallied 1 percent. Standard & Poor’s 500 Index futures advanced 0.2 percent after the gauge surged 1.1 percent yesterday. The S&P GSCI index of commodities climbed 0.7 percent to the highest level in a week. Asian credit risk dropped for a fifth day in the longest run since March 19. The Dollar Index lost 0.2 percent.
Mervyn King, governor of the Bank of England. Photographer: Chris Ratcliffe/Bloomberg
U.S. stocks were buoyed yesterday after jobless claims and inflation data supported the case for more stimulus by the Federal Reserve, which meets for two days from June 19. Data today may show U.S. industrial production slowed and consumer confidence fell. Greek elections on June 17 may determine if the country upholds austerity conditions attached to international aid, and could lead to the first ouster from the euro bloc.
“We’re likely to see increasing talk from governments about how they can encourage the growth agenda,” said Angus Gluskie, who helps manages more than $350 million at White Funds Management in Sydney. “There’s plenty of uncertainties out there. We may still see investors continue to be nervous about Spain and Italy in the aftermath of Greece’s election.”
Monetary policy makers from the U.K. to Japan and Canada stepped up warnings about the threat to world financial markets should Europe fail to contain its debt crisis. Bank of England Governor Mervyn King said the central bank will activate a sterling liquidity facility to aid banks, and plans to have a form of credit easing operating to boost lending as the case for looser policy “is growing.”
Oil Gains
Crude in New York climbed 0.7 percent to $84.53 a barrel, extending yesterday’s 1.6 percent jump as the Organization of Petroleum Exporting Countries kept its output quota unchanged amid calls for members to reduce production to comply with current targets. Copper futures advanced 0.9 percent in London, set for its first weekly increase in seven. Gold for immediate delivery added 0.1 percent in its sixth consecutive advance.
“It would appear the weaker U.S. dollar and rallying U.S. equity markets in response to speculation that global leaders would intervene after this weekend’s election in Greece, were supportive,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd., wrote in a note.
China, the biggest consumer of most commodities including steel and aluminum, can further cut its reserve requirement ratio as M2 growth is “relatively slow” this year, according to a report by researchers at the Chinese Academy of Social Sciences published in the People’s Daily.
Chinese Yuan
The People’s Bank of China raised its daily yuan fixing by 0.16 percent, the most since May 2, to 6.3089 per dollar today. That’s 0.97 percent stronger than yesterday’s closing spot in Shanghai and the currency is allowed to trade as much as 1 percent on either side of the fixing.
The yuan strengthened 0.07 percent to 6.3657 per dollar in Shanghai, heading for the first weekly gain in six weeks, according to the China Foreign Exchange Trade System.
Three stocks rose in the MSCI Asia Pacific Index (MXAP) for each one that fell. China Railway Group Ltd. (390) advanced 2 percent in Hong Kong after the Economic Information Daily said the Chinese government plans to build six coal transport railways. DeNA Co., Japan’s biggest social-gaming operator, surged 14 percent on a stock buy-back plan.
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
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