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Commodities rise; Europe stocks drop on downgrade

Commodities rise; Europe stocks drop on downgrade
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First Published: Mon, May 09 2011. 09 50 PM IST
Updated: Mon, May 09 2011. 09 50 PM IST
London: Commodities rebounded from the steepest weekly slump since 2008 amid optimism about economic growth and speculation recent declines were exaggerated. European stocks and Greek bonds fell, while the euro erased early gains as Standard and Poor’s cut its rating on the country.
The S&P GSCI Index of 24 raw materials jumped 1.7% at 10.11am in New York following last week’s 11% slide. Silver futures climbed 4.5%, oil rallied 2.5% and wheat rose 2.3%.
The Stoxx Europe 600 Index fell 0.3%, while the S&P 500 increased 0.2%. Greece’s 10-year note yield rose 22 basis points.
Last week’s commodities rout knocked off $99 billion of market value, driving out speculators and prompting Goldman Sachs Group Inc. to predict a possible recovery.
Crude rose to $99.60 per barrel in New York, after losing 15% last week. Silver sank 27% in the same period. Wheat jumped on Monday as adverse weather in North America, Europe and Asia threatened to reduce global production.
Commodity bulls say the expanding global economy, led by China, India and Brazil, is boosting demand at a time when producers from BHP Billiton Ltd, the largest mining company, to BP Plc, Europe’s second-biggest oil producer, can’t keep up.
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Claudia Carpenter, Andrew Rummer, Michael Patterson, Michael Shanahan, Dan Tilles and Steve Voss in London contributed to this story.
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First Published: Mon, May 09 2011. 09 50 PM IST