London: Stocks gained around the world on Thursday, with China’s benchmark index posting its biggest advance this month, on expectations the global economic recovery will strengthen. Copper rose, heading for the best year in more than two decades.
The MSCI Emerging Markets Index gained 0.9% as of 1.40pm in London, and futures on the Standard and Poor’s 500 Stock Index climbed 0.3%. China’s Shanghai Composite Index rose 2.6% and the MSCI World Index of developed nation shares added 0.3%. Copper increased 0.9%. The dollar fell against all but one of the 16 most-traded currencies tracked by Bloomberg.
Recovery signs: A file photo of traders on the floor of NYSE. A gain in US futures indicated the S&P 500 may extend Wednesday’s advance. Henny Ray Abrams / AP
Chinese imports will surge as the economy grows by more than 10%, narrowing the nation’s trade surplus by 19% next year, Bank of America-Merrill Lynch said. Orders for US durable goods rose in November, pointing to increases in spending and production that will help sustain the expansion into 2010.
“All this stimulus funding has gone into the economy and pushed the equity market higher,” Manoj Ladwa, an equity strategist at ETX Capital in London, said in an interview on Bloomberg Television. “We’re going to see a continuation in the first quarter of 2010.”
The MSCI Asia Pacific Index climbed 1.3%, its biggest gain in three weeks. Shin-Etsu Chemical Co. Ltd, the world’s largest maker of silicon wafers, added 3.5% in Tokyo and Inotera Memories Inc. climbed to a 19-month high in Taipei. Canon Inc. increased 6.1% after the electronics maker kept its dividend unchanged and won European Union approval to buy Dutch office equipment maker OCE NV.
Dubai’s equity index rose 1.4% as investors speculated an 11% drop this month, the biggest decline worldwide, was overdone, given the emirate’s growth prospects.
Most European markets were closed for the Christmas holiday. The UK’s benchmark FTSE 100 index climbed 0.6% in London, as Fresnillo Plc, the world’s biggest primary silver producer, rallied 6.1%. ArcelorMittal, the world’s largest steel maker, added 0.6% in Amsterdam.
The gain in US futures indicated the S&P 500 may extend Wednesday’s 0.2% advance. Bookings minus demand for transportation equipment, which is often volatile, gained 2% last month, almost twice as much as forecast, figures from the commerce department showed on Thursday in Washington. A 33% slump in civilian aircraft limited the gain in total durable goods orders to 0.2%. Initial jobless claims fell by 28,000, more than forecast, to 452,000 in the week ended 19 December, from 480,000 the prior week, labour department figures showed on Thursday in Washington.
Copper for delivery in three months rose $60 (around Rs2,800) to $7,060 a tonne on the London Metal Exchange. The metal advanced 130% this year, the most since at least 1986. Tin rose to its highest since October 2008. Gold for immediate delivery added 1% to $1,098.65 an ounce in London. The metal is heading for a ninth consecutive annual gain, the best winning streak since at least 1948.
Crude oil for January delivery fell 0.4% to $76.35 a barrel in New York trading.
The dollar weakened 0.4% against the euro and 0.1% compared with the yen. South Africa’s rand jumped 1% versus the dollar and 0.6% against the euro as precious metals, among the country’s biggest export earners, advanced.
Britain’s pound snapped three days of declines against the dollar, rising 0.1%, while UK government bonds fell, driving up the yield on the benchmark 10-year note as much as 4 basis points (bps) to 4.03%, the highest level since 11 June.
The extra yield investors demand to own emerging market debt over US treasurys dropped 6bps to 2.84 percentage points, the lowest level since August 2008, according to JPMorgan Chase and Co.’s EMBI+ Index.