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Stocks Advance With Metals on China as Euro Weakens, Bonds Gain

Bloomberg logoBloomberg 28-03-2014 Liau Y-Sing and Nick Gentle

March 28 (Bloomberg) -- European stocks climbed for a fourth day and metals rebounded amid speculation China will do more to support growth. The euro weakened and the region’s bonds gained on signs inflation is slowing.

The Stoxx Europe 600 Index advanced 0.7 percent at 9:55 a.m. in London, trimming this month’s decline to 1.2 percent. Standard & Poor’s 500 Index futures added 0.4 percent after the gauge closed yesterday up less than 0.1 percent on the year. A measure of Chinese shares in Hong Kong capped its biggest weekly jump since November. Copper rose 1.1 percent and aluminum advanced 0.8 percent. The 18-nation euro touched a one-month low and Portugal’s 10-year yield fell below 4 percent for the first time since 2010.

China has policies in reserve to deal with any economic volatility this year and can’t ignore “difficulties and risks” from a slowdown in the economy, Premier Li Keqiang said in a statement on the government’s website. Treasuries are heading for their first monthly loss this year before a report that may show consumer spending, the biggest part of the U.S. economy, is increasing.

“Some of the bearish China bets have been taken off the table because of expectation that the Chinese authorities might come up with some stimulus,” said Sim Moh Siong, a foreign- exchange strategist at Bank of Singapore Ltd. “The belief is that they’re coming with something and that should help to stabilize growth and prevent a hard landing.”

The Stoxx 600’s four-day gain is the longest rally streak in more than a month. The gauge is up 1.6 percent this quarter. Basic-resources companies led today’s rally, and 18 out of 19 industry groups climbed.

Pirelli Earnings

Pirelli & C. SpA increased 3.1 percent after reporting 2013 earnings that surpassed analysts’ predictions. Intesa Sanpaolo SpA gained 3.6 percent as it forecast dividend payouts of about 10 billion euros ($13.7 billion) through 2017.

Aviva Plc lost 6.8 percent after the insurer said its asset-management business is selling U.S. equity manager River Road Asset Management LLC.

S&P 500 futures expiring in June rose after the index dropped 0.2 percent yesterday for a second day of declines as banks and technology companies fell. The S&P 500 has fallen 0.6 percent this month.

The MSCI Emerging Markets Index advanced 0.8 percent, poised for the highest close since Jan. 2. The Hang Seng China Enterprises Index of mainland shares listed in Hong Kong jumped 1.3 percent. The gauge climbed 6.1 percent this week, the most since China unveiled a sweeping reform package in November.

Turkey Climbs

Turkey’s benchmark gauge climbed 1.8 percent to the highest level in almost three months. Consumer confidence rebounded this month, the State Institute of Statistics said today before local elections scheduled for this weekend. Hungary’s BUX advanced for a fifth day, the longest run of gains since Jan. 14, climbing 1.2 percent.

Russia’s Micex Index added 1.6 percent, trimming this month’s decline to 6.4 percent. Shares are headed for the biggest monthly losses since May 2012 after the West imposed sanctions on the country’s officials following President Vladimir Putin annexation of Ukraine’s Crimea.

The U.S. House of Representatives is ready to impose more sanctions on Russian officials for the annexation of Crimea and give aid to Ukraine after the Senate passed the bill yesterday with broad bipartisan support. The House’s next opportunity to act on the measure would be in a session scheduled for 11 a.m. in Washington today.

Ukraine Bonds

The yield on Ukraine’s April 2023 dollar bond fell nine basis points to 8.75 percent and the note due in June gained for a 12th day. Societe Generale SA made Ukraine one of its top emerging-market bond recommendations after the country won an International Monetary Fund aid package to help avert default.

The S&P GSCI gauge of 24 commodities climbed for a sixth consecutive session, the longest streak since Feb. 19. Copper advanced to $6,633 a metric ton, bringing the drop this year to 9.9 percent. Aluminum rose to $1,752 a ton. Gold added 0.4 percent to $1,295.76 an ounce, heading for a 7.5 percent gain this year and third consecutive monthly advance. West Texas Intermediate oil increased 0.2 percent to $101.46 a barrel and is 3.1 percent higher for this year.

The euro declined 0.1 percent to $1.3725 after falling to $1.3705, the lowest level since Feb. 28. The common currency was little changed at 140.33 yen. The yen was little changed at 102.24 per dollar.

Portugal’s 10-year bond yield fell six basis points to 3.999 percent, the lowest since January 2010. Spain’s two-year note yield declined three basis points to 0.70 percent, falling below the equivalent U.K. rate for the first time since 2008, based on closing-market data.

Slowing Inflation

Annual consumer-price inflation in the German state of Saxony slowed to 0.9 percent, from 1.2 percent in February, the German Statistics Office of Saxony said. Spanish data, calculated using a European Union method, showed prices fell 0.2 percent from a year ago.

Greece’s 10-year yield fell 22 basis points to 6.67 percent. The nation is set to receive a commitment from euro- region authorities as soon as next week for a payment of 8.3 billion euros ($11.4 billion) in the next step in the country’s aid program, three officials familiar with the negotiations said.

Ten-year U.S. yields were little changed at 2.69 percent. Treasuries have fallen 0.1 percent this month, based on the Bloomberg U.S. Treasury Bond Index, set for their first decline since December.

U.S. personal spending probably rose 0.3 percent in February, following a 0.4 percent gain in January, according to the median of 79 estimates in a Bloomberg survey of economists before the Commerce Department report today. Personal income also increased 0.3 percent, based on the responses.

--With assistance from Yoshiaki Nohara in Tokyo, Emma O’Brien in Wellington and Stephen Kirkland, Paul Dobson, Cecile Vannucci and Claudia Carpenter in London.

To contact the reporters on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net; Nick Gentle in Hong Kong at ngentle2@bloomberg.net To contact the editors responsible for this story: Stuart Wallace at swallace6@bloomberg.net Stephen Kirkland

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