Emerging market rally continues
Greek issue contained, macro-economic data looking fairly good: fund manager
- Bloomberg
- Published: 00:00 March 13, 2010
- Traders sit at their desks at MICEX (Moscow Interbank Currency Exchange) in Moscow, Russia. The emerging markets gauge is heading for its longest winning streak since May.
- Image Credit: Bloomberg
London: Stocks rose as commodity companies and banks drove the MSCI Emerging Markets Index to its fifth week of gains. Gold led commodities higher, while the yen weakened.
The emerging-markets gauge rose 0.4 per cent at 10.50am in London, heading for its longest winning streak since May. Futures on the S&P 500 added 0.2 per cent, after the benchmark index for US equities on Thursday hit a 17-month high, while the MSCI World Index climbed 0.6 per cent. The yen fell against 11 of its 16 most-traded counterparts. Gold rose for a second day and nickel climbed for the first time in five days.
Emerging-market and high-yield bond funds each took in more than $1 billion (Dh3.67 billion) in the week to March 10, according to EPFR Global, a Cambridge, Massachusetts-based research company. European industrial output rose the most in more than two decades in January, signalling the recovery may be strengthening. Japanese Finance Minister Naoto Kan said intervention is an "option" when "markets move too abruptly".
"This is a continuation of the improvement in risk appetite," said Henrik Degrer, a fund manager at Svenska Handelsbanken in Stockholm, which oversees $36 billion.
"The Greek issue seems to be contained, so now we can shift again to the macro-economic data, which is looking fairly good."
South Africa's Sasol and Cnooc of China climbed, driving the MSCI emerging index higher. The Micex index in Russia, the world's largest energy supplier, advanced 0.9 per cent for the first gain in four days. The rouble strengthened 0.6 per cent against the dollar, heading for its biggest weekly rise this year.
The MSCI World Index of 23 developed nations' stocks rose 0.3 per cent, while the Stoxx Europe 600 Index advanced 0.3 per cent. Volkswagen AG, Europe's biggest carmaker, climbed 2.7 per cent in Frankfurt on speculation that Thursday's announcement of a convertible-bond sale reduces the likelihood of a rights offer.
Nikkei climbes
The MSCI Asia Pacific Index advanced 0.4 per cent as Japan's Nikkei 225 climbed 0.8 per cent. Nissan Motor, which gets about 77 per cent of its revenue outside Japan, increased 2.4 per cent.
US futures gained before a Commerce Department report at 8.30am in Washington that may show retail sales fell in February as blizzards kept Americans away from auto dealers and limited shopping at malls.
Purchases generally dropped 0.2 per cent after rising 0.5 per cent in January, according to the median estimate of 77 economists surveyed by Bloomberg News.
Meanwhile, the yen weakened to 124.18 per euro, from 123.82. The pound strengthened 0.5 per cent to $1.5139 after UK house prices increased in February at the fastest pace in more than seven years.
The Swiss franc strengthened to 1.4589 per euro, from 1.4617 Thursday, even after the central bank said it would act to stem "an excessive appreciation" against the euro.
The Dollar Index declined 0.5 per cent to 79.922, paring its gain for the year to 2.7 per cent.
"The Bank of Japan is sensitive to the dangers of deflation, after the yen appreciated in the current cycle, and is looking at intervention, along with the Swiss National Bank," said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London.
Silver
Silver added 0.7 per cent to $17.295 an ounce. Nickel for delivery in three months advanced 1.6 per cent to $21,625 a metric ton, taking its gain this year to 17 per cent, the most of any of the main metals traded on the London Metal Exchange.
Crude oil rose 0.3 per cent to $82.35 a barrel in New York, before a meeting of the Organisation of Petroleum Exporting Countries this week.
The yield on the 10-year Greek bond, the country's new benchmark, fell 1 basis point to 6.34 per cent, while the two-year note yield advanced 10 basis points to 5.12 per cent. The yield premium investors demand to hold the 10-year security over German bunds declined 4 basis points to 311 basis points.
The cost of protecting against a default on Greek government bonds rose, with credit-default swaps climbing 5 basis points to 307, according to CMA DataVision prices.
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