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European, Asian Shares, U.S. Futures Climb; BHP Billiton Gains
By Sarah Jones
Aug. 24 (Bloomberg) -- Stocks in Europe and Asia advanced and U.S. index futures rose as higher commodity prices boosted the earnings outlook for metal producers.
BHP Billiton Ltd. and Rio Tinto Group gained as copper rallied in London and Shanghai. Sulzer climbed 5.3 percent after the Swiss maker of textile machines reported profit that beat analysts’ estimates. WPP Plc increased 3.6 percent after Deutsche Bank AG recommended the shares.
Europe’s Dow Jones Stoxx 600 Index added 0.7 percent to 236.58 as of 8:23 a.m. in London. The measure has rebounded 50 percent since March 9 to a 10-month high after Germany and France unexpectedly expanded last quarter. The global economy is “beginning to emerge” from a recession after aggressive action by central banks and governments, Federal Reserve Chairman Ben S. Bernanke said at a meeting in Jackson Hole, Wyoming last week.
“People are relieved that we are no longer talking about the ‘D-word’ of depression and rather that we are now coming out of recession,” said Rupert Armitage, head of equities at Shore Capital Group Plc in London, which has about $2.3 billion in assets under management. “Ultimately it’s about confidence and investors now are feeling much better than they did 9-to-12 months ago.”
Standard & Poor’s 500 Index futures expiring in September gained 0.6 percent, indicating the benchmark for U.S. equities may extend last week’s increase that sent the measure to the highest level since October. The MSCI Asia Pacific Index jumped 2.4 percent today, led by raw-material producers.
Stimulus Measures
Governments around the world have pledged about $2 trillion in stimulus measures amid the worst worldwide recession since the Great Depression. Bernanke and other global policy makers have cautioned that the recovery is likely to be muted, indicating they would not soon remove all the stimulus injected into the financial system.
Nouriel Roubini, the New York University professor who predicted the financial crisis, said the chance of a double-dip recession is increasing because of risks related to ending global monetary and fiscal stimulus.
The global economy will bottom out in the second half of 2009, Roubini wrote in a Financial Times commentary today. The recession in the U.S., the U.K., and some European countries will not be “formally over” before the end of the year, while the recovery has started in nations such as China, France, Germany, Australia and Japan, he said.
Mining Companies
BHP Billiton, the world’s largest mining company, gained 1.5 percent to 1,615.5 pence in London, while Rio Tinto, the third-biggest, jumped 1.5 percent to 2,433.5 pence. Copper rose 1.8 percent on the London Metal Exchange amid speculation the demand outlook for industrial metals is improving.
Sulzer surged 5.3 percent to 86.35 Swiss francs after reporting first-half net income of 155.6 million francs ($146 million). Analysts in a Bloomberg survey had predicted 128 million francs.
WPP advanced 3.6 percent to 522.5 pence after Deutsche Bank upgraded the world’s largest advertising company to “buy” from “hold” before it reports earnings this week. The analysts increased their price estimate for the shares by 31 percent to 610 pence.
By Sarah Jones
Aug. 24 (Bloomberg) -- Stocks in Europe and Asia advanced and U.S. index futures rose as higher commodity prices boosted the earnings outlook for metal producers.
BHP Billiton Ltd. and Rio Tinto Group gained as copper rallied in London and Shanghai. Sulzer climbed 5.3 percent after the Swiss maker of textile machines reported profit that beat analysts’ estimates. WPP Plc increased 3.6 percent after Deutsche Bank AG recommended the shares.
Europe’s Dow Jones Stoxx 600 Index added 0.7 percent to 236.58 as of 8:23 a.m. in London. The measure has rebounded 50 percent since March 9 to a 10-month high after Germany and France unexpectedly expanded last quarter. The global economy is “beginning to emerge” from a recession after aggressive action by central banks and governments, Federal Reserve Chairman Ben S. Bernanke said at a meeting in Jackson Hole, Wyoming last week.
“People are relieved that we are no longer talking about the ‘D-word’ of depression and rather that we are now coming out of recession,” said Rupert Armitage, head of equities at Shore Capital Group Plc in London, which has about $2.3 billion in assets under management. “Ultimately it’s about confidence and investors now are feeling much better than they did 9-to-12 months ago.”
Standard & Poor’s 500 Index futures expiring in September gained 0.6 percent, indicating the benchmark for U.S. equities may extend last week’s increase that sent the measure to the highest level since October. The MSCI Asia Pacific Index jumped 2.4 percent today, led by raw-material producers.
Stimulus Measures
Governments around the world have pledged about $2 trillion in stimulus measures amid the worst worldwide recession since the Great Depression. Bernanke and other global policy makers have cautioned that the recovery is likely to be muted, indicating they would not soon remove all the stimulus injected into the financial system.
Nouriel Roubini, the New York University professor who predicted the financial crisis, said the chance of a double-dip recession is increasing because of risks related to ending global monetary and fiscal stimulus.
The global economy will bottom out in the second half of 2009, Roubini wrote in a Financial Times commentary today. The recession in the U.S., the U.K., and some European countries will not be “formally over” before the end of the year, while the recovery has started in nations such as China, France, Germany, Australia and Japan, he said.
Mining Companies
BHP Billiton, the world’s largest mining company, gained 1.5 percent to 1,615.5 pence in London, while Rio Tinto, the third-biggest, jumped 1.5 percent to 2,433.5 pence. Copper rose 1.8 percent on the London Metal Exchange amid speculation the demand outlook for industrial metals is improving.
Sulzer surged 5.3 percent to 86.35 Swiss francs after reporting first-half net income of 155.6 million francs ($146 million). Analysts in a Bloomberg survey had predicted 128 million francs.
WPP advanced 3.6 percent to 522.5 pence after Deutsche Bank upgraded the world’s largest advertising company to “buy” from “hold” before it reports earnings this week. The analysts increased their price estimate for the shares by 31 percent to 610 pence.
Asian Stocks Advance on Signs Global Recovery Is Strengthening
By Shani Raja and Masaki Kondo
Aug. 24 (Bloomberg) -- Asian stocks rose, with the MSCI Asia Pacific advancing the most in six weeks, after sales of existing homes in the U.S. surged by a record and China Petroleum & Chemical Corp. posted its highest quarterly profit.
BHP Billiton Ltd., the world’s biggest mining company, gained 4.1 percent in Sydney after copper and oil prices climbed in New York. China Petroleum, known as Sinopec, rose 2.6 percent as Asia’s biggest refiner said it plans “rapid” overseas expansion to secure oil supplies. James Hardie Industries NV, the largest supplier of siding to U.S. homes, added 5.4 percent in Sydney, and in Tokyo Canon Inc., the world’s biggest maker of digital cameras, surged 5.4 percent.
“The fundamentals of the global economy and corporate earnings are improving, supporting the resilience of the market,” said Yoshinori Nagano, a senior strategist at Tokyo- based Daiwa Asset Management Co., which oversees the equivalent of $91 billion. “The housing report confirmed the U.S. is clearly on a path to recovery.”
The MSCI Asia Pacific Index rose 2.3 percent to 113.19 as of 1:15 p.m. in Tokyo, the steepest increase since July 14. Almost 10 times as many stocks gained as retreated, and all 10 industry groups climbed, led by materials producers.
Japan’s Nikkei 225 Stock Average added 3.2 percent to 10,560.47, with only 7 stocks declining. All Asian benchmark gauges advanced, led by a 5.1 percent gain in the Philippines.
Global Recovery?
In New York, the Standard & Poor’s 500 Index climbed 1.9 percent on Aug. 21 to a level not seen since Oct. 6. Purchases of existing U.S. homes jumped 7.2 percent in July, the most since the tallies began in 1999, the National Association of Realtors said.
James Hardie climbed for the first time in four days, adding 5.4 percent to A$7.04 in Sydney.
The global economy is “beginning to emerge” from recession after “aggressive” action by central banks and governments, Federal Reserve Chairman Ben S. Bernanke said Aug. 21. He made the comments in a speech at the Kansas City Fed’s annual meeting of policy makers in Jackson Hole, Wyoming.
BHP added 4.1 percent to A$38.11 after copper futures climbed 5.1 percent in New York on Aug. 21, the steepest gain since June 1. Rio Tinto Group, the world’s third-biggest mining company, advanced 4.9 percent to A$59.04.
Komatsu Ltd., the world’s second-largest maker of construction machinery, rose 2.9 percent to 1,683 yen in Tokyo, and Mitsubishi Corp., a Japanese trading company that gets more than a third of its sales from commodities, advanced 3.9 percent to 1,915 yen.
Oil Stocks Rise
Sinopec rose 2.6 percent to HK$7.10 in Hong Kong. Profit for the first nine months may gain by more than 50 percent as China’s economic recovery spurs fuel demand, the company said in a statement to the Shanghai stock exchange yesterday.
Net income in the second quarter surged at least 10-fold to 22 billion yuan ($3.22 billion), according to Bloomberg News calculations.
Oil also traded near a 10-month high in New York today on speculation demand will increase as the global economy emerges from the deepest recession since World War II.
Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, rose 4.7 percent to A$48.78. Also in Sydney, Santos Ltd., an explorer seeking to develop three liquefied natural gas projects, climbed 4 percent. Inpex Corp., Japan’s biggest energy explorer, surged 4.7 percent to 753,000 yen.
Commodities stocks in the S&P 500 are trading on average at 33.1 times this year’s estimated earnings and at 17.7 times next year’s profits, the widest gap among the gauge’s 10 industry groups, according to data compiled by Bloomberg.
Australian Banks
Australian banks rallied on speculation a recovery will reduce loan losses and spur credit growth. National Australia Bank Ltd., the nation’s largest by assets, climbed 3.8 percent to A$26.65. Australia & New Zealand Banking Group Ltd., Australia’s fourth-biggest lender, gained 4.1 percent to A$19.80.
China Construction Bank Corp., the nation’s second largest, rose 2.3 percent to HK$5.99 in Hong Kong after first-half profit beat analysts’ estimates on higher fee income and lower operating costs and bad-loan provisions.
Shares on the MSCI Asia Pacific Index traded at 23.7 times their estimated net income on Aug. 21, the lowest level in a month. The gauge dropped 3.2 percent last week, the most since the five days ended June 19, on concern China will curb bank lending, hampering growth.
Delayed Projects
“We see some signs confirming that the real economy is starting to get out of the period of freefall,” European Central Bank President Jean-Claude Trichet said on Aug. 22 at the Jackson Hole symposium. This “does not mean at all that we do not have a very bumpy road ahead of us.”
Among stocks that fell, WorleyParsons Ltd., Australia’s biggest engineering company, dropped 4 percent to A$25.76 in Sydney, the steepest slump in the MSCI Asia Pacific. The company forecast full-year profit will decline from a record on project delays. DUET Group fell 2.9 percent to A$1.53 after Credit Suisse Group AG cut the Australian energy asset investor’s stock rating to “neutral.”
Hyundai Motor Co. South Korea’s largest automaker, climbed 4.9 percent to 108,000 won, as the company named Chung Eui Sun, the only son of the company’s chairman, vice chairman in charge of planning and sales.
Japanese exporters got a further boost from the strengthening dollar, which lifts the value of overseas sales at Japanese companies when converted into their home currency. The dollar gained to as much as 94.70 yen today from 93.77 at the close of Tokyo stock trading on Aug. 21.
Japanese Exporters
Canon Inc., the world’s biggest maker of digital cameras and which gets a third of its sales from the Americas, added 5.4 percent to 3,690 yen. Honda Motor Co., a carmaker which gets more than half its sales in North America, gained 3.6 percent to 3,060 yen, and bigger rival Toyota Motor Corp. rose 2.5 percent to 4,080 yen. BHP, Canon and Toyota were the biggest contributors to the MSCI Asia Pacific Index’s increase.
“Japanese exporters are discounted as investors are wary of U.S. consumer spending,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co. in Tokyo. “The home-sales report will likely help narrow this discount.”
Yakult Honsha Co. jumped 9.8 percent to 2,295 yen in Tokyo after a report in the Nikkei newspaper speculated that profit at the Japanese maker of soft drinks may gain on overseas sales.
speculators are optimistics. When shanghai squeeze your balls 3 times last week, they tick down a little. When us rebounded because of 3 men words, sti stand hard.
NORMAL expectation.
buylist ( Date: 24-Aug-2009 13:59) Posted:
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Crazy, but Shanghai market can be a damper........
1st session close above 2,600...hope 2nd session will double bring out the buyers for laggards..
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STRAITS TIME IDX |
.FTSTI | i | -- | 2600.47 |
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+55.610 | +2.2 | 225,788,600 |