>>Will it last? Emerging Market Stocks Rebound Led by China, Commodities Gain
By Gavin Serkin
May 24 (Bloomberg) -- Emerging-market stocks gained, lifting the benchmark index by the most in eight days, and commodities rallied on speculation China will delay efforts to cool economic growth. U.S. stock index futures fell.
The MSCI Emerging Markets Index advanced 0.6 percent as of 10:14 a.m. in London as the Shanghai Composite Index jumped the most in seven months. The Stoxx Europe 600 Index rose 0.3 percent, rebounding from a six-month low. Futures on the Standard & Poor’s 500 Index fell 0.5 percent after the U.S. benchmark index advanced 1.5 percent on May 21. Copper rose for a third day and palladium for a second day. The ruble strengthened the most since January against the euro. The euro declined against all 16 of its most-traded peers.
President Hu Jintao said China will move gradually and independently in changing the nation’s exchange-rate mechanism, as talks with the U.S. opened in Beijing today. China should be cautious in introducing new tightening measures because the global economic environment is complex, Xu Lianzhong, an official with the National Development and Reform Commission’s price monitoring center, wrote in a commentary published today in the China Securities Journal.
“The market is expecting a softening in the government’s stance on tightening given the uncertain outlook on global growth,” said Larry Wan, Shanghai-based deputy chief investment officer at KBC-Goldstate Fund Management Co., which oversees about $583 million.
China’s Gains
The Shanghai Composite jumped 3.5 percent, paring its retreat this year to 18 percent. China Vanke Co., the nation’s biggest listed developer by market value, surged 4.9 percent. India’s Bombay Stock Exchange Sensitive Index advanced the most in two weeks as Citigroup Inc. said the benchmark climb 10 percent by December. Reliance Natural Resources Ltd. soared 22 percent in Mumbai after Chairman Anil Ambani and his brother Mukesh Ambani agreed to scrap a deal that prevented the billionaires from competing with each other in business.
The decline in U.S. futures indicated the S&P 500 may pare some of its late rally on May 21, when it broke a three-day losing streak as investors speculated equities may have fallen too much following a 12 percent retreat since April 23. Sales of U.S. previously owned homes probably rose 5.6 percent in April to the highest level in five months as buyers took advantage of the last weeks of a government tax credit, economists said before a report from the National Association of Realtors at 10:00 a.m. in Washington.
Metals Advance
In London, Rio Tinto Group, the world’s third-largest mining company, gained 2.1 percent as base metals advanced. Barratt Developments Plc rose 3.2 percent after JPMorgan Chase & Co. recommended Britain’s biggest homebuilder by volume. Prysmian SpA rallied 2.4 percent in Milan on a report a group of investors are considering buying a stake in the company. Markets including Switzerland, Austria, Norway, Denmark and Greece are closed today for public holidays.
Copper for delivery in three months gained 0.5 percent to $6,881 a metric ton on the London Metal Exchange. Nickel and zinc also advanced. Gold for immediate delivery added 0.8 percent to $1,185.89 an ounce and palladium by 2.3 percent to $446.60 an ounce. Crude oil for July delivery rose 0.4 percent to $70.28 a barrel in New York trading.
The euro weakened 1.1 percent to $1.2436 and 111.82 yen. The Dollar Index, which tracks the currency against those of six major U.S. trading partners, rose for the first time in four days, climbing 0.8 percent.
Bonds Climb
Government bonds rose, with the yield on the 10-year Treasury dropping 4 basis points to 3.21 percent. German 10-year government bonds advanced for a fifth day, driving the yield almost 2 basis points lower to 2.65 percent, after earlier sliding to within a basis point of the lowest level since at least 1990.
The cost of insuring against losses on European corporate bonds fell, with credit-default swaps on the Markit iTraxx Crossover Index of 50 mostly high-yield companies declining 6.5 basis points to 581.75, according to Markit Group Ltd. Swaps tied to government securities sold by Greece, whose deficit crisis sparked declines in sovereign debt that have roiled markets this month, dropped 46.5 basis points to 672, CMA DataVision prices show.
To contact the reporters on this story: Gavin Serkin at gserkin@bloomberg.net
Last Updated: May 24, 2010 05:25 EDT
_______________________________________________________
If you take anything I say as advice, you're crazier than I am.
