Stocks, Metals Rise on Dubai Debt Talks, Manufacturing Orders
Dec. 2 (Bloomberg) -- Stocks gained from London to HongKong as concern about Dubai’s debt delay eased and metals pricesrose after U.S. manufacturing expanded for a fourth straightmonth.
The MSCI Asia Pacific Index rose 0.5 percent to a six-weekhigh of 120 at 12:45 p.m. in Tokyo as record gold prices boostedZijin Mining Group Co. The Standard & Poor’s 500 Index added 1.2percent to 1,108.86 yesterday. Europe’s Dow Jones Stoxx 600Index jumped 2.7 percent, the most since July. Gold forimmediate delivery gained 1 percent to $1,208.16 an ounce afterrising as high as $1,209.16.
Metals climbed after a report showed demand formanufacturing in the U.S. would continue to expand. TheInstitute for Supply Management’s new orders index increased to60.3 from 58.5, and a measure of export demand climbed to thehighest level since August 2008. Stocks surged after Europeanfinance ministers said potential risks from Dubai were limitedas the emirate started talks to restructure $26 billion of debt.
“Encouraging economic data and an ongoing commitment fromgovernments to support economies have served to buoy investorconfidence,” said Tim Schroeders, who helps manage $1.1 billionat Pengana Capital Ltd. in Melbourne. “Investor appetite forrisk has increased, and that has also generated a renewed demandfor commodities.”
Zijin, which yesterday agreed to buy a stake in IndophilResources NL, climbed 4.6 percent to HK$9.05 in Hong Kong. Goldadvanced to a record for a second straight day as investorssought to protect their wealth against a slumping dollar.
Copper Rises
Rio Tinto Ltd., the world’s third-biggest mining company,advanced 2.7 percent to A$73.32. BHP Billiton Ltd., the world’sbiggest mining company, gained 1.2 percent to A$41.85. Copper inLondon yesterday reached $7,089 a metric ton, the highest sinceSeptember 2008. The metal lost 0.4 percent to $7,045 a ton today.
“The market is running to commodities in anticipation thatthese will gain from demand for hedging against inflation andthat the global economic recovery is under way,” said JonathanRavelas, market strategist at Manila-based Banco de OroUnibankInc., which manages $8 billion.
The dollar and yen weakened against major counterparts amidhigher demand for riskier assets. The dollar weakened to as muchas $1.5096 to the euro in Tokyo from $1.5081 in New Yorkyesterday. It declined to $1.5144 on Nov. 25, the lowest levelsince Aug. 8, 2008. Japan’s currency fell to as weak as 131.27per euro from 130.74.
Dubai Debt
The Nov. 25 announcement that Dubai World was seeking todelay payments on some of its $59 billion of liabilitiesprompted investors to sell emerging-market assets and stocks, asthe price of insuring against a default by Dubai surged.
Dubai is in talks with its lenders to restructure $26billion of debt, easing concern that a default would add to the$1.7 trillion that financial companies around the world havewritten down because of the credit crisis.
The MSCI World Index climbed 2 percent yesterday asLuxembourg Finance Minister Jean-Claude Juncker said banks inthe euro zone have “really limited” exposure to Dubai’s debtproblems. The MSCI Asia Pacific Index has gained 5.4 percent thepast three days after a 3.1 percent slump on Nov. 27 amidoptimism the region will be mostly sheltered from Dubai losses.
“Dubai to me is a blip to the Asian market,” Arnout vanRijn, chief investment officer of Robeco Hong Kong Ltd., toldBloomberg Television. “It looks like there is an overexaggeration.”
The cost to protect against a default by Dubai dropped 113basis points to 457 yesterday, the biggest one-day decline sinceFeb. 23, according to credit-default swap prices from CMADatavision.
Won Climbs
South Korea’s won rose 0.6 percent to 1,154 per dollar,near a 14-month high, after the central bank said foreign-exchange reserves climbed to $271 billion last month from $264billion at the end of October, reflecting inflows of foreigninvestment. The Philippine peso strengthened 0.6 percent to46.59 per dollar and the Taiwan dollar gained 0.2 percent toNT$32.14.
“There’s a healthy balance-of-payments surplus, and Koreahas been intervening to buy dollars against its currency whichis another reason reserves have been picking up,” said MitulKotecha, Hong Kong-based head of global foreign-exchangestrategy at Calyon. “The main theme is receding concerns aboutDubai and the contagion spreading to global markets.”
Australia’s currency advanced for a third day against theyen as gold, the nation’s third most-valuable raw materialexport, rose and a gauge of metals prices gained to thestrongest level since September 2008 yesterday.
The so-called Aussie gained as much 0.4 percent to 80.53yen from 80.18 yen in New York yesterday. The currency rose asmuch as 0.3 percent to 92.76 U.S. cents from 92.50 cents.
Crude oil for January delivery gained $1.09 to $78.37 abarrel on the New York Mercantile Exchange yesterday, thehighest settlement since Nov. 18. Prices are up 76 percent thisyear.
To contact the reporters on this story:Patrick Chu in Tokyo at pachu@bloomberg.net.
Last Updated: December 1, 2009 22:47 ESTSource: Bloomberg
« Back to Business News
Related News
-
Stocks, Commodities Rise on Dubai, China; Dollar Weakens Dec 1, 2009 @ 01:15 AM
Dec. 1 (Bloomberg) -- Stocks rallied from Shanghai to NewYork and the dollar slid as Dubai World said it’s in talks torestructure less than half its debt and Chinese manufacturinggrew at the fastest pace in five years. Treasury 10-year notesdropped for the first time in six days.
-
Stocks lose ground on worries about economy's path Dec 1, 2009 @ 01:15 AM
NEW YORK — The stock market is holding up, just not pressing ahead as the economic signs look a little less promising.
-
Yen, Dollar Rise on Rate Outlook; Stocks, Commodities Decline Dec 1, 2009 @ 01:15 AM
Dec. 7 (Bloomberg) -- The yen strengthened and the dollarrose the most in a month against the euro, as investors weighedwhether the world economy is recovering fast enough to warranthigher central bank interest rates. U.S. stock index futures andcommodities fell.
-
US Stocks, Commodities Decline as Bonds Gain on Dubai Crisis Dec 1, 2009 @ 01:15 AM
Nov. 27 (Bloomberg) -- U.S. and emerging-market stocksslumped and commodities dropped as Dubai’s attempt to delay debtrepayments unnerved investors. Treasuries and the dollar rosewhile credit-default swaps surged.
-
Dollar Weakens to 14-Year Low, Asia Stocks Fall; Metals Rise Dec 1, 2009 @ 01:15 AM
Nov. 26 (Bloomberg) -- The dollar dropped to a 14-year lowagainst the yen. Asian stocks declined, led by Japaneseexporters, and European stocks fell.
