(Bloomberg) -- The euro weakened on concern a split among the region’s central bankers will hamper efforts to revive the economy. European and Asian stocks gained, while U.S. index futures declined.The 16-nation currency fell 1.2 percent against the yen and 0.4 percent versus the dollar. Europe’s Dow Jones Stoxx 600 Index rose 0.6 percent, led by Barclays Plc, and the MSCI Asia Pacific Index gained 0.3 percent. Futures on the Standard & Poor’s 500 Index slid 0.4 percent before earnings reports from JPMorgan Chase & Co. and Google Inc.
European Central Bank council member Axel Weber said yesterday the bank shouldn’t reduce its benchmark interest rate below 1 percent, from 1.25 percent now, putting him at odds with policy makers who say borrowing costs must fall to near zero. The Organization for Economic Cooperation and Development forecast March 31 that Europe’s economy will shrink 4.1 percent this year, compared with 4 percent in the U.S.Barclays climbed for a fifth day, adding 4.8 percent to 206.25 pence. The London-based bank’s President Robert Diamond said better-than-estimated earnings this month from New York- based Goldman Sachs Group Inc. and Wells Fargo & Co. in San Francisco aren’t a “one-off” phenomenon.
Dassault Declines
Stocks pared their gains in Europe after Dassault Systemes SA, whose design software is used by Toyota Motor Corp., declined 5 percent to 28.40 euros. Dassault plans to cut its full-year revenue forecast after first-quarter sales fell short of its targets, Chief Financial Officer Thibault de Tersant said on a conference call.Geneva-based STMicroelectronics NV retreated 2.5 percent to 4.50 euros. Europe’s largest chipmaker said it plans to cut quarterly dividends 67 percent to 3 cents a share, citing the need to “maintain a solid financial foundation.”Espoo, Finland-based Nokia Oyj, the world’s largest maker of mobile phones, will also post results today. New York-based JPMorgan will report earnings before the open of regular U.S. trading. Mountain View, California-based Google will announce results after the close.
China Growth
Analysts estimate that profits at S&P 500 companies decreased for the seventh straight quarter in the January to March period, the longest stretch of declines since at least the Great Depression. China’s economy grew 6.1 percent in the first quarter from a year earlier, the slowest pace in almost 10 years, a government report showed today. Separate reports showed that growth in industrial production and investment accelerated, adding to evidence that Premier Wen Jiabao’s 4 trillion yuan ($585 billion) stimulus plan is working.Crude oil for May delivery rose 77 cents, or 1.6 percent, to $50.02 a barrel in electronic trading on the New York Mercantile Exchange. Soybeans climbed to a three-month high on the Chicago Board of Trade on speculation for a smaller harvest in Argentina.
Emerging-Market Stocks
The MSCI index of 23 developing economies’ stocks rose 0.3 percent to 645.58, extending this year’s rally to 14 percent. JPMorgan strategist Adrian Mowat forecast the gauge will jump to 900 this year. That would be the highest closing level since Sept. 8, a week before New York-based Lehman Brothers Holdings Inc.’s bankruptcy froze global credit markets and sparked an exodus from emerging markets.The cost of protecting corporate bonds sold by European companies from default fell in the credit-default swaps market, reflecting an improvement in perceptions of credit quality.
Asian currencies rose, led by the Indonesian rupiah and South Korea’s won, as optimism a global recession is easing bolstered demand for emerging-market assets.
The rupiah strengthened 1.3 percent to 10,750 per dollar as of 3:52 p.m. in Jakarta and the won rose 0.5 percent to 1,332.10, nearing a three-month high, ,according to data compiled by Bloomberg. The MSCI Asia Pacific index of regional shares climbed 0.3 percent, after rising as much as 2.2 percent. Indonesia’s currency extended a week-long rally on speculation the nation’s commodity exports and the prospect of the government being re-elected will help the economy recover from a global slump.
Indonesia Bond Sale
The currency was also buoyed as Indonesia’s offering of $650 million in Islamic bonds attracted orders for more than six times the amount planned. The rupiah is leading gains this month among Asia’s 10 most-active currencies, the Jakarta Composite Index of stocks has rallied over 13 percent so far in April, already beating the rise in March, and the country’s local-currency bonds are outperforming the rest of the region. The Jakarta Composite Index rose 1.4 percent, a fourth day of gains, while foreign investors bought $138 million more Indonesian equities than they sold this month.
The baht traded at 35.38 per dollar versus 35.40 on April 10, according to data compiled by Bloomberg. It earlier reached 35.33, the highest level since April 7. Elsewhere, the Singapore dollar rose 0.2 percent to S$1.4989 against the U.S. currency and the Philippine peso climbed 0.2 percent to 47.72. Taiwan’s dollar was little changed at NT$33.80 and the yuan traded at 6.8324 from 6.8322 yesterday.
No comments:
Post a Comment