Most Stocks in Europe Rise, Greek Notes Climb on EU Aid; Zinc, Oil Advance
Stocks rose in Europe and Greek two- year notes advanced for a fifth day after officials approved an aid payment to Greece to prevent a default. Zinc climbed to a two-month high and oil advanced.
The Stoxx Europe 600 Index added 0.2 percent as more than two stocks gained for every one that fell, while Canada’s Standard & Poor’s/TSX Composite Index increased 0.6 percent at 4 p.m. in New York. U.S. markets were closed for the Independence Day holiday. Thai stocks jumped the most in 14 months after the opposition won elections. The Greek two-year note yield dropped below 26 percent for the first time since June 14. Zinc rose 1.4 percent while oil climbed 0.1 percent to near a two-week high.
Europe’s finance ministers authorized an 8.7 billion-euro ($12.6 billion) loan payout to Greece by mid-July and said they would aim to complete talks with banks on maintaining their Greek debt holdings within weeks. Stocks pared gains after S&P said a rollover plan serving as the basis for talks between investors and governments would qualify as a distressed exchange and prompt a “selective default” rating.
“The threat by S&P to put Greece in selective default in case of a debt rollover seems to be the proverbial ‘fly in the soup’ for risk appetite as the week opens,” Greg Venizelos, a credit strategist at BNP Paribas SA in London, wrote in a note. “Overall however, we are in a better place risk-wise than this time last week.”
The gain in the Stoxx 600 extended last week’s biggest rally in almost a year. RWE AG (RWE) rose 0.8 percent after a person familiar with the matter said the German utility is considering a sale of its Npower unit. Strategists at Deutsche Bank AG and Nomura Holdings Inc. turned bullish on European stocks, saying it’s time to buy shares as risks to global economic growth wane.
Canadian stocks rose for a fifth day, the longest streak of advances in six weeks, led by commodity producers. Sino-Forest Corp. (TRE), the forestry company fighting a short seller’s assertions of financial manipulation, climbed 30 percent after hedge-fund manager Wellington Management Co. said in a filing it bought a stake in the company. Brazil’s Bovespa Index gained for a sixth day, up 0.8 percent, for its longest winning streak since April.
Standard & Poor’s 500 Index futures slipped 0.1 percent. U.S. stocks posted their biggest weekly rally in two years ahead of the July 4 holiday. The gain helped the S&P 500 erase about 75 percent of the decline suffered since reaching its high for the year on April 29. Through June 24, U.S. equities had fallen for seven of the previous eight weeks on concern the European debt crisis would spread and the U.S. economy slow. The index is up 6.5 percent for the year, data compiled by Bloomberg show.
Greek two-year yields slid 73 points to 26.11 percent, at one point dipping below 26 percent to 25.76 percent. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments climbed four basis points to 222.
The euro advanced less than 0.1 percent against the dollar and dropped less than 0.1 percent versus the yen.
Zinc gained as much as 1.4 percent to $2,398 a metric ton, the highest since April 18. Gold climbed for the first time in three days as some investors bought the metal after its drop to a six-week low and as a weaker dollar spurred demand for an alternative asset. Gold rose 0.9 percent in London to $1,496.50 an ounce.
Sugar and coffee fell in London, paring gains from last week, while cocoa advanced.
Oil in New York traded near a two-week high, climbing as much as 0.6 percent to $95.47 a barrel before paring to $95. Brent crude gained as much as 0.4 percent after Goldman Sachs Group Inc. said the “downside risk” to oil would be “reduced proportionately” as sales of stockpiles from members of the International Energy Agency might be less than announced.
The MSCI All-Country World Index climbed 0.4 percent, its sixth straight gain and the longest winning streak since March. The MSCI Asia Pacific Index rallied 1.2 percent. The MSCI Emerging Markets Index jumped 1.1 percent to the highest close since May 4.
Thailand’s SET Index rose 4.7 percent, the most since April 2010, and the baht strengthened 0.9 percent against the dollar after the election victory by allies of exiled premier Thaksin Shinawatra. The Shanghai Composite gained 1.9 percent to the highest close since May 20 after a report showed a slowdown in manufacturing, boosting speculation China will refrain from increasing interest rates.
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