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Europe Stock Futures Rise as Yen Declines After China GDP Data

Published: October 18, 2012 | 8:28 am
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European stock futures gained as Asian shares rose to a one-month high after Chinese data signaled stable expansion in the region’s biggest economy. Commodities climbed and the yen weakened against all peers.
Euro Stoxx 50 index futures advanced 0.2 percent as of 7:15 a.m. in London as the MSCI Asia Pacific Index climbed 0.9 percent. Standard & Poor’s 500 Index futures were unchanged before Microsoft Corp. and Morgan Stanley post earnings today. The yen declined for a sixth day. The S&P GSCI Index of 24 raw materials climbed 0.2 percent as crops and metals advanced. Rubber in Tokyo jumped 1.6 percent and Asian bond risk declined.
China’s economy grew 7.4 percent in the third quarter from a year earlier, government figures showed, matching the median analyst estimate in a Bloomberg News survey. Premier Wen Jiabao said before the data that China’s economy was stabilizing. U.S. data yesterday showed housing starts surged to a four-year high, as earnings beat analyst estimates at 76 percent of the 70 companies in the S&P 500 that have released results so far, according to data compiled by Bloomberg.
“The Chinese economy into the end of third quarter is on reasonable footing,” said Jonathan Cavenagh, a strategist at Westpac Banking Corp. in Singapore. “That suggests risk appetite remains supported on dips.”
About three stocks rose for each that fell on MSCI’s Asian gauge, led by materials shares. The index is poised to close at the highest level since Sept. 19. Japan’s Nikkei 225 Stock Average gained 2 percent, advancing for a fourth day in its longest winning streak since Aug. 9. The Hang Seng China Enterprise Index of mainland companies listed in Hong Kong added 1.7 percent.

Stabilizing Growth
Industrial production in China increased 9.2 percent in September from a year earlier, rebounding from a three-year low of 8.9 percent expansion in August, today’s report also showed. Economists surveyed by Bloomberg News forecast a 9 percent gain, based on the median estimate.
“China’s economic growth has started to stabilize,” the official Xinhua News Agency yesterday quoted Wen as saying in meetings with industry leaders, company executives and local government officials on Oct. 12-15. The government is confident of achieving annual targets, and the economy will continue to show “positive changes,” he said, according to the report.
The third-quarter growth rate marked a seventh-straight period of deceleration. Wen set a full-year growth target of 7.5 percent in March, the lowest goal since 2004.

EU Meeting
Komatsu Ltd., a construction-machinery company that relies on China for 14 percent of its revenue, gained 4.7 percent. China Mobile Ltd., the world’s biggest phone company by subscribers, rose 2.4 percent in Hong Kong. James Hardie Industries SE, a building-materials supplier that gets 67 percent of sales from the U.S., increased 1.7 percent in Sydney.
U.S. housing starts jumped 15 percent to an annualized 872,000 last month, exceeding all estimates in a Bloomberg survey. They gained the most since two months before the collapse of Lehman Brothers Holdings Inc. in 2008. Tomorrow is the 25th anniversary of the Black Monday stock-market crash, the biggest single-day equity decline in history.
The yen slid 0.3 percent to 79.15 per dollar, the least since Sept. 13, and lost 0.1 percent to 103.71 versus the euro. Leaders from the 27-member nations of the European Union will begin a two-day summit in Brussels today.
Copper in London rose for a third day, climbing 0.2 percent to $8,238.75 a metric ton, and zinc advanced 0.7 percent. Wheat in Chicago added 0.5 percent to $8.61 a bushel as soybeans and corn also traded higher.

Goldman Cut
Brent crude in London rose 0.3 percent to $113.57 a barrel and West Texas Intermediate futures in New York rose 0.1 percent to $92.20. Goldman Sachs Group Inc. cut its 2013 forecast for London-traded Brent to $110 a barrel from $130.
Treasuries were little changed, with 10-year yields holding at 1.81 percent, before government data forecast to show initial applications for jobless insurance increased. Claims probably rose to 365,000 last week from 339,000 in the previous period, according to the median estimate compiled by Bloomberg before the Labor Department report later today.
The Markit iTraxx Australia index slid 3.5 basis points to 132 as of 2:05 p.m. in Sydney, according to Credit Agricole SA. The measure is on course for its lowest close since March 19, according to data provider CMA.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan dropped 1 basis point to 113.5 as of 11:05 a.m. in Hong Kong, Credit Agricole prices showed.


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