 "US stocks rally with emerging assets on data, China stimulus")
US stocks rallied to a seven-week high after manufacturing in the world's largest economy showed signs of stabilising. Optimism that central banks from Asia to Europe will add to stimulus boosted emerging-market currencies and commodities, while Treasuries fell with gold.
The Standard & Poor's 500 Index rebounded from its third consecutive monthly decline, while European equities capped their longest rally since October. The yuan strengthened for the first time in eight days, while the Canadian dollar climbed after a report showed the nation's economy unexpectedly grew in the fourth quarter. Crude fluctuated, while Treasury yields climbed.
While February marked a fourth consecutive monthly slide for global stocks, signs that financial tension in China and a slump in commodities are abating has seen shares recover more than 5 per cent since February 11. Data suggesting that American consumers can still power the world's largest economy and hints from central banks in Asia and Europe that more stimulus is at the ready underpinned the revival.
Equities got a boost after data showed American factory activity in February shrank less than forecast as gains in new orders and production provided signs that the beleaguered industry could soon stabilise. Factories should also find a source of strength in domestic demand, which is being boosted by consumers with solid job gains and a nascent pickup in wage growth. A rebound in oil prices in the final two weeks of February also helped stabilise equity markets.
"The numbers today were pretty decent with manufacturing up from estimates and the construction numbers were pretty good as well so if inflation keeps moving over the next few months that could be a good thing as we started the year talking about negative rates and deflation," Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone. "Financials are also bouncing back after getting beat and as we get some stability in oil prices, things are looking a little better."
Stocks
The S&P 500 climbed 1.8 percent at 12:22 pm in New York, rebounding from a slide Monday that erased its gain for February. The index's three-month decline is the longest since 2011, though its 7.6 per cent surge since February 11 has cut a loss in 2016 by more than half.
Financial companies led stocks higher Tuesday with a 2.8 per cent surge, the biggest gain in three weeks. Northern Trust Corp climbed 4.8 per cent and Legg Mason Inc. added 4.1 per cent as all but two stocks in the group rallied.
Auto stocks rallied, with Ford Motor Co surging 4.3 per cent and Fiat Chrysler Automobiles NV jumping 6 per cent after their February sales beat analysts' estimates. General Motors Co gained 1.4 per cent.
The Stoxx Europe 600 Index climbed 0.8 per cent, with all industry groups rising at least 0.8 per cent. The equity benchmark has rebounded more than 11 per cent since falling to a 2013 low on February 11, led by miners and energy producers.
BMW AG gained 4.2 per cent after its chief executive officer forecast another year of record sales, and Daimler AG added 2.5 per cent after its CEO noted strong growth in Europe and China. London Stock Exchange Group Plc surged 7.2 per cent after Intercontinental Exchange Inc said it's considering a bid for the company that's in merger talks with Deutsche Boerse AG.
The MSCI Emerging Markets Index gained for a third day, climbing 1.9 per cent to the highest since January 6. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong increased 1.9 per cent, and the Shanghai Composite Index advanced 1.7 per cent, the most in a week.
The Ibovespa advanced to the highest this year in Brazil, which lists China as its biggest trading partner.
Data from China showed a manufacturing purchasing managers index contracted more than estimated in February, matching the lowest level in seven years, according to the statistics bureau. The nation's parliament will gather on Saturday for an annual meeting, where plans for 2016 and the next five years will be outlined.
The yuan rose for the first time in eight days in Shanghai after the PBOC raised its reference rate by 0.1 percent to 6.5385.
"With a stronger fixing, they're trying to ensure a stable yuan even as they ease policy through the reserve-requirement- ratio channel," said Khoon Goh, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. in Singapore.
India's S&P BSE Sensex jumped 3.4 percent, the most on a closing basis since 2013, after Prime Minister Narendra Modi on Monday unveiled a pro-farmer budget, which set aside 877.7 billion rupees ($12.9 billion) to be spent on expanding irrigation, crop insurance, rural roads and on improving groundwater resources.
Currencies
The yen dropped against 31 major peers, falling from strongest level in almost three years against the euro. It declined 0.3 percent to 112.99 per dollar and slipped 0.3 percent to 122.94 per euro. Canada's dollar strengthened 0.4 percent against its U.S. counterpart.
A Bloomberg gauge of 20 emerging-market currencies increased 0.6 percent, rising for a second day. Russia's ruble was the best performer, strengthening 1.6 percent, followed by a 1.4 percent gain in South Africa's rand and a 1.1 percent jump in Mexico's peso.
Commodities
Oil climbed from the highest close in more than seven weeks following the first monthly decline in production from the Organization of Petroleum Exporting Countries since November. West Texas Intermediate rose as much as 2.3 percent to $34.52 a barrel before erasing the gain. It traded at $34 a barrel in New York.
Gold slipped from a two-week high after the U.S. economic data dented demand for haven assets. Nickel led gains in industrial metals, rising 1.1 percent, as the Chinese stimulus bolstered confidence in the world's second-largest economy. Lead climbed 0.9 percent.
Bonds
Treasuries tumbled after the manufacturing data provided a sign of resilience for the U.S. economy. The decline comes after U.S. government securities returned 3 percent in the first two months of this year, their biggest back-to-back gain since January 2015, according to Bloomberg World Bond Indexes. The benchmark 10-year note yield surged seven basis points, or 0.07 percentage point, to 1.80 percent.
Germany's bonds fell as demand for haven assets waned. The Japanese government got paid to borrow money for a decade for the first time, selling 2.2 trillion yen of the debt at an average yield of minus 0.024 percent on Tuesday. The benchmark 10-year bond yield dropped to minus 0.075 percent after the auction, matching a record low.
The Standard & Poor's 500 Index rebounded from its third consecutive monthly decline, while European equities capped their longest rally since October. The yuan strengthened for the first time in eight days, while the Canadian dollar climbed after a report showed the nation's economy unexpectedly grew in the fourth quarter. Crude fluctuated, while Treasury yields climbed.
Read more from our special coverage on "US STOCKS"
While February marked a fourth consecutive monthly slide for global stocks, signs that financial tension in China and a slump in commodities are abating has seen shares recover more than 5 per cent since February 11. Data suggesting that American consumers can still power the world's largest economy and hints from central banks in Asia and Europe that more stimulus is at the ready underpinned the revival.
Equities got a boost after data showed American factory activity in February shrank less than forecast as gains in new orders and production provided signs that the beleaguered industry could soon stabilise. Factories should also find a source of strength in domestic demand, which is being boosted by consumers with solid job gains and a nascent pickup in wage growth. A rebound in oil prices in the final two weeks of February also helped stabilise equity markets.
"The numbers today were pretty decent with manufacturing up from estimates and the construction numbers were pretty good as well so if inflation keeps moving over the next few months that could be a good thing as we started the year talking about negative rates and deflation," Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone. "Financials are also bouncing back after getting beat and as we get some stability in oil prices, things are looking a little better."
Stocks
The S&P 500 climbed 1.8 percent at 12:22 pm in New York, rebounding from a slide Monday that erased its gain for February. The index's three-month decline is the longest since 2011, though its 7.6 per cent surge since February 11 has cut a loss in 2016 by more than half.
Financial companies led stocks higher Tuesday with a 2.8 per cent surge, the biggest gain in three weeks. Northern Trust Corp climbed 4.8 per cent and Legg Mason Inc. added 4.1 per cent as all but two stocks in the group rallied.
Auto stocks rallied, with Ford Motor Co surging 4.3 per cent and Fiat Chrysler Automobiles NV jumping 6 per cent after their February sales beat analysts' estimates. General Motors Co gained 1.4 per cent.
The Stoxx Europe 600 Index climbed 0.8 per cent, with all industry groups rising at least 0.8 per cent. The equity benchmark has rebounded more than 11 per cent since falling to a 2013 low on February 11, led by miners and energy producers.
BMW AG gained 4.2 per cent after its chief executive officer forecast another year of record sales, and Daimler AG added 2.5 per cent after its CEO noted strong growth in Europe and China. London Stock Exchange Group Plc surged 7.2 per cent after Intercontinental Exchange Inc said it's considering a bid for the company that's in merger talks with Deutsche Boerse AG.
The MSCI Emerging Markets Index gained for a third day, climbing 1.9 per cent to the highest since January 6. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong increased 1.9 per cent, and the Shanghai Composite Index advanced 1.7 per cent, the most in a week.
The Ibovespa advanced to the highest this year in Brazil, which lists China as its biggest trading partner.
Data from China showed a manufacturing purchasing managers index contracted more than estimated in February, matching the lowest level in seven years, according to the statistics bureau. The nation's parliament will gather on Saturday for an annual meeting, where plans for 2016 and the next five years will be outlined.
The yuan rose for the first time in eight days in Shanghai after the PBOC raised its reference rate by 0.1 percent to 6.5385.
"With a stronger fixing, they're trying to ensure a stable yuan even as they ease policy through the reserve-requirement- ratio channel," said Khoon Goh, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. in Singapore.
India's S&P BSE Sensex jumped 3.4 percent, the most on a closing basis since 2013, after Prime Minister Narendra Modi on Monday unveiled a pro-farmer budget, which set aside 877.7 billion rupees ($12.9 billion) to be spent on expanding irrigation, crop insurance, rural roads and on improving groundwater resources.
Currencies
The yen dropped against 31 major peers, falling from strongest level in almost three years against the euro. It declined 0.3 percent to 112.99 per dollar and slipped 0.3 percent to 122.94 per euro. Canada's dollar strengthened 0.4 percent against its U.S. counterpart.
A Bloomberg gauge of 20 emerging-market currencies increased 0.6 percent, rising for a second day. Russia's ruble was the best performer, strengthening 1.6 percent, followed by a 1.4 percent gain in South Africa's rand and a 1.1 percent jump in Mexico's peso.
Commodities
Oil climbed from the highest close in more than seven weeks following the first monthly decline in production from the Organization of Petroleum Exporting Countries since November. West Texas Intermediate rose as much as 2.3 percent to $34.52 a barrel before erasing the gain. It traded at $34 a barrel in New York.
Gold slipped from a two-week high after the U.S. economic data dented demand for haven assets. Nickel led gains in industrial metals, rising 1.1 percent, as the Chinese stimulus bolstered confidence in the world's second-largest economy. Lead climbed 0.9 percent.
Bonds
Treasuries tumbled after the manufacturing data provided a sign of resilience for the U.S. economy. The decline comes after U.S. government securities returned 3 percent in the first two months of this year, their biggest back-to-back gain since January 2015, according to Bloomberg World Bond Indexes. The benchmark 10-year note yield surged seven basis points, or 0.07 percentage point, to 1.80 percent.
Germany's bonds fell as demand for haven assets waned. The Japanese government got paid to borrow money for a decade for the first time, selling 2.2 trillion yen of the debt at an average yield of minus 0.024 percent on Tuesday. The benchmark 10-year bond yield dropped to minus 0.075 percent after the auction, matching a record low.