Dec. 1 (Bloomberg) -- Stocks rallied from Shanghai to New York and the dollar slid as Dubai World began talks to restructure less than half its debt and Chinese manufacturing grew at the fastest pace in five years. Treasury 10-year notes dropped for the first time in six days.
The Standard & Poor’s 500 Index added 1.2 percent to 1,108.86 at 4:09 p.m. in New York. Europe’s Dow Jones Stoxx 600 Index jumped 2.7 percent, the most since July. The dollar weakened against 14 of the 16 most-traded currencies, gold rose to a record and oil climbed 1.4 percent. Aluminum, copper, lead and zinc led gains in industrial metals.
Dubai is in talks with its lenders to restructure $26 billion of debt, easing concern that a default would add to the $1.7 trillion that financial companies around the world have written down because of the credit crisis. An HSBC Holdings Plc index showed China’s manufacturing increased last month, while the Institute for Supply Management said U.S. manufacturing expanded in November for a fourth consecutive month.
“The scare with Dubai World is dissipating, it’s a faded memory at this point,” said Scott Richter, who helps oversee $18.6 billion at Fifth Third Asset Management in Cleveland. “The fact that they’re trying to restructure the debt and the central banks in the region are providing liquidity implies that it’s a more contained issue and it’s not going to blow up into another systemic Lehman Brothers. Or at least that’s the hope.”
Commodity Producers Rally
The Dow Jones Industrial Average increased 126.74 points, or 1.2 percent, to a 14-month high of 10,471.58. Caterpillar Inc., the largest maker of earth-moving equipment, and Home Depot Inc., the biggest home-improvement retailer, jumped at least 2.2 percent after the number of contracts to buy previously owned U.S. homes unexpectedly rose 3.7 percent in October, according to the National Association of Realtors.
Commodity producers, real-estate and media companies led gains in Europe as all 19 industry groups in the Stoxx 600 advanced at least 1.7 percent. HSBC Holdings, the region’s largest bank, added 2.7 percent in London as concern eased that losses from a possible default by Dubai World will spread. BHP Billiton Ltd. led basic-resources companies higher, gaining 3.5 percent.
The MSCI Asia Pacific Index jumped 1.5 percent. Nissan Motor Co., which gets 35 percent of its revenue from North America, added 3 percent in Tokyo as the yen slumped against the dollar. Baoshan Iron & Steel Co. surged 7.8 percent in Shanghai on speculation steel demand in China will increase.
The Shanghai Stock Exchange Composite Index added 1.3 percent and extended its two-day gain to 4.5 percent, the biggest since October.
‘Following on the Upside’
“When China is going up, the U.S., Europe and the U.K. are following on the upside,” said Louis de Fels, a Paris-based money manager at Raymond James Asset Management International, which oversees $29 billion. “We can see that what’s happening in Dubai was not a huge factor for the market, because we just went down for one day.”
Dubai’s announcement Nov. 25 that it would seek to delay debt repayments stoked concern that a potential default would set back the global financial system’s recovery from the recession. It triggered the biggest stock market slump in three months in Asia and Europe’s worst rout since April as the debt request risked adding to banks’ losses.
Qatar’s benchmark equity index fell 8.3 percent on the nation’s first trading day since Dubai’s announcement, leading declines across the Persian Gulf. The Dubai Financial Market General Index sank for a second day, dropping 5.6 percent to the lowest level since August.
Treasuries Drop
Treasuries declined as demand for the relative safety of U.S. government debt decreased. The yield on the 10-year Treasury note rose seven basis points to 3.27 percent.
The extra yield investors demand to own emerging-market debt over U.S. treasuries fell 14 basis points to 3.16 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index. The MSCI Emerging Markets Index of equities climbed 2.3 percent, the most since Nov. 9.
Dubai’s credit risk fell the most in nine months. The cost to protect against a default by Dubai dropped 113 basis points to 457, the biggest one-day decline since Feb. 23, according to credit-default swap prices from CMA Datavision.
Crude oil for January delivery gained $1.09 to $78.37 a barrel in New York. Natural gas fell 1.8 percent to $4.762 per million British thermal units on forecasts for milder weather later this month.
Copper advanced 1.7 percent to $3.231 a pound in New York, while lead, zinc and aluminum also rallied. Gold rose for the 11th time in 12 session, jumping to a record above $1,200 an ounce as declines in the dollar spurred investor demand for an inflation hedge.
Australia’s dollar strengthened, rising 1.3 percent versus the yen and 0.9 percent against the U.S. currency, as the nation’s central bank increased interest rates for an unprecedented third consecutive month, citing the pace of Asia’s economic recovery.
Tags: Dubai,dubai
0 comments:
Post a Comment
Be the First