Stocks in Europe rallied for a sixth day while copper and rubber jumped to records after China refrained from raising interest rates. US treasuries dropped and stock futures rose.
The Stoxx Europe 600 Index advanced 0.4 per cent at 12:42 pm in London for its longest stretch of gains since July. Futures on the Standard & Poor’s 500 Index rose 0.3 per cent. Russia’s RTS Index gained 1.1 per cent to the highest level on a closing basis since August 2008 while the yen fell against 15 of its 16 most-traded peers. The S&P GSCI index of 24 commodities climbed 0.9 per cent, and oil added 1.4 per cent after OPEC kept output targets unchanged at a weekend meeting.
China has ordered banks to set aside larger reserves and didn’t announce an interest-rate increase, even as data released the following day showed the inflation rate reached 5.1 per cent last month. As Federal Reserve policy makers meet tomorrow, a US Commerce Department report is likely to show retail sales climbed for a fifth straight month in November.
“We are seeing a bit of a relief rally on the back of the fact that China decided not to raise interest rates over the weekend,” said Richard Hunter, London-based head of UK equities at Hargreaves Lansdown Plc. “Those interest rate rises are nonetheless expected at some point.”
The Stoxx 600 rose to the highest level since September 2008 as more than four companies gained for every one that fell. The index has advanced 9.2 per cent in 2010. Kazakhmys Plc and Fresnillo Plc paced a rally in mining shares, rising more than 2 per cent.
Wellstream Holdings Plc jumped 5 per cent as General Electric Co agreed to buy the oilfield-services provider for about 800 million pounds ($1.3 billion). Rhodia SA jumped 6.5 per cent after Credit Suisse Group AG recommended the chemicals company. The MSCI Asia Pacific Index climbed 0.6 per cent to its highest level in more than a month.
US stock futures gained 0.3 per cent after the S&P 500 index rose for four straight days to its highest level since the week of Lehman Brothers Holdings Inc’s bankruptcy in 2008.
The S&P 500 index must rise 0.9 per cent to erase all the losses since September 12, 2008, when it closed at 1,251.70 in the last trading session before Lehman’s collapse sent global markets into a tailspin. The index plunged 46 per cent from that date through March 9, 2009.
Fed policy makers, due to hold their final meeting of 2010 on December 14, may reiterate the strategy to buy an additional $600 billion of Treasuries through June to try to trim joblessness and avert deflation, or an extended drop in prices.
China’s Shanghai Composite Index advanced 2.9 per cent, the biggest gain in eight weeks. The government is likely to set a target of at least 7 trillion yuan ($1.1 trillion) of new loans for 2011, said two people briefed on the matter. Economists at UBS AG and Bank of America Corp had forecast a new-loan quota of 6.5 trillion yuan to 7 trillion yuan. The MSCI Emerging Markets Index advanced 0.4 per cent, led by energy stocks including PetroChina Co and Moscow-based OAO Gazprom.
