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BL: Stocks, Commodities Rally as Yen Weakens on Economic Outlook

By Stuart Wallace

March 29 (Bloomberg) -- Stocks rose around the world and commodities rallied as the dollar and the yen fell against the euro after Greek deficit concern abated and the economic recovery sparked demand for higher-yielding assets.

The MSCI World Index of 23 developed nations’ stocks gained for a third day, advancing 0.3 percent at 12:01 p.m. in London, and the MSCI Emerging Markets Index added 0.7 percent. Futures on the Standard & Poor’s 500 index rose 0.5 percent. Crude oil increased 0.9 percent to exceed $80 a barrel and copper jumped 1.7 percent. The yen dropped against the Australian and New Zealand dollars.

The European Union reported an improvement in business and consumer confidence, days after the region’s leaders and the International Monetary Fund pledged to help Greece finance its budget deficit, the biggest in the bloc. A U.S. jobs report on April 2 may show the largest increase in employment in three years. The MSCI World gauge has increased 10 percent in eight weeks on evidence of a sustained global recovery.

“Growth is starting to look more and more entrenched,” said Nader Naeimi, an investment strategist in Sydney at AMP Capital Investors, which oversees $90 billion. “Investors are looking for the recovery to turn into an outright expansion.”

BHP Advances

The Stoxx Europe 600 Index advanced 0.2 percent as BHP Billiton Ltd., the world’s largest mining company, surged 1.6 percent. Bank of Ireland Plc and Allied Irish Banks Plc limited gains, dropping more than 16 percent on concern the government will have to increase its stakes in the lenders as a so-called bad bank begins taking over toxic loans.

Futures on the Standard & Poor’s 500 Index rose before a government report forecast to show U.S. consumer spending rose for a fifth month in February. The MSCI Asia Pacific Index rallied 0.5 percent.

The Shanghai Composite Index jumped 2.1 percent, the most in more than seven weeks, while Taiwan’s Taiex index climbed 0.9 percent. China Resources Land Ltd. and China Construction Bank Corp. advanced at least 1.6 percent after reporting higher profits. Stocks advanced even after Stern Hu, the Australian executive who headed Rio Tinto’s iron ore business in China, was sentenced to 10 years in jail by a court in Shanghai after being found guilty of taking bribes and infringing commercial secrets.

Ruble Weakens

The ruble weakened the most against the euro in more than two months and was little changed against the dollar after suicide bombers killed at least 37 people in the deadliest terrorist attacks in Moscow since 2004. The Micex index climbed 1.3 percent for the biggest gain since March 17.

Dubai shares fell the most in six weeks, with the DFM General Index sliding as much as 2.7 percent. Contracts to protect against a default by Dubai rose 15 basis points to 419, according to credit-default swap prices from CMA DataVision.

Crude oil for May delivery rose 81 cents to $80.81 a barrel in New York trading. Copper gained $130 to $7,645 a metric ton and nickel $380 to $23,980 a ton in London, both advancing for a third day. Gold for immediate delivery rose 0.4 percent to $1,111.88 an ounce as investors bought the metal as a hedge against the weaker dollar. Silver and platinum also gained.

The yen weakened 0.5 percent to 124.64 against the euro, with the dollar also depreciating 0.5 percent, to $1.3481 per euro. The Dollar Index slid 0.5 percent to 81.269. The Australian dollar climbed 1.1 percent to 91.36 U.S. cents and New Zealand’s dollar advanced 0.8 percent to 70.95 U.S. cents.

Treasuries fell, with the yield on the 10-year note up almost 1 basis point to 3.86 percent, near the highest level since June. The 10-year German bund yield was at 3.15 percent, while the yield on the Greek 10-year bond rose 4 basis points to 6.27 percent.

The extra yield investors demand to hold the Greek securities instead of bunds widened 4 basis points to 309 basis points. Greece plans to sell a benchmark bond in euros with a seven-year maturity, and may price the issue to yield about 310 basis points over swaps, said a banker involved in the transaction.

To contact the reporter on this story: Stuart Wallace in London at [e-mail]

Last Updated: March 29, 2010 07:07 EDT