Stocks rallied worldwide and Greek bonds rose for the first time in two weeks on speculation Europe’s most indebted nation will get an international bailout to avert a default. The euro strengthened and the yen weakened.
The MSCI World Index of 23 developed nations’ stocks rose 0.5 per cent at 12:07 pm in London. The MSCI Emerging Markets Index increased 0.7 per cent to a 20-month high. Futures on the Standard & Poor’s 500 Index gained 0.3 per cent. The premium investors demand to hold Greek two-year notes instead of benchmark German debt narrowed by 19 basis points. The euro strengthened against 11 of its 16 most-traded counterparts while the yen declined versus all of them.
“The recent market action means that an external intervention may be unavoidable” for Greece, UBS AG’s chief European economist, Stephane Deo, and his colleagues in London wrote in a report. “An intervention over the weekend is a distinct possibility.”
European Union officials are “ready to act” on financial assistance for Greece, European Commission spokeswoman Amelia Torres said in Brussels. Funds investing in emerging-market stocks attracted the highest inflows in six months in the week ended April 7, garnering $3.27 billion, according to EPFR Global.
Yields on Greek two-year notes fell 18 basis points after rising more than 200 basis points in the past three weeks. Greece plans to announce today how much it will sell at an April 13 auction of Treasury bills. National Bank of Greece SA, the nation’s biggest lender, rallied 2.1 per cent, snapping a three-day, 17 per cent plunge.
The Stoxx Europe 600 Index rallied 1 per cent as basic- resources shares led gains by all 19 industry groups. The benchmark gauge of equities in 18 western European nations headed for its sixth straight weekly gain, the longest winning streak in a year. Givaudan SA, the world’s biggest maker of flavors and fragrances, surged 5.9 per cent in Zurich after saying sales advanced.
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The MSCI Asia Pacific Index rose 0.3 per cent. Macarthur Coal Ltd. jumped 8.3 per cent in Sydney after rejecting a A$3.64 billion ($3.4 billion) bid from New Hope Corp, which is vying with Peabody Energy Corp and Noble Group Ltd for control of the world’s biggest producer of pulverized coal. Xstrata, the world’s fourth-largest copper producer, rose 2.7 per cent in London after saying it approached Macarthur shareholders Posco and ArcelorMittal about a potential rival bid.
The gain in US futures indicated the S&P 500 may extend yesterday’s 0.3 per cent advance. The benchmark gauge for US equities rose for the seventh time in nine days as retailers rallied on faster-than-estimated sales growth.
Eastern Europe led a rebound in emerging-market stocks, with Hungary’s Budapest Stock Exchange Index gaining 1.7 per cent and the Czech PX Index climbing 1.2 per cent. The Micex Index in Russia advanced 1.3 per cent while the ruble strengthened the most against the dollar in more than three weeks, adding 0.6 per cent. Turkey’s lira added 0.5 per cent for an eighth day of gains, its longest rally against the dollar since January.
The euro strengthened for a second day against the dollar, appreciating 0.3 per cent to $1.3405. The yen lost 0.6 per cent to 125.56 per euro and weakened 0.3 per cent to 93.67 per dollar.
Copper for delivery in three months rose 0.6 per cent to $7,940 a metric ton on the London Metal Exchange. Aluminum advanced to its highest level since January. Gold for immediate delivery added 0.6 per cent to $1,157.6 an ounce, for a fifth consecutive gain. Crude oil rose 1 per cent to $86.25 a barrel in New York, appreciating for the first time in three days.