Shares rise amid hopes of recovery

09:14, December 11, 2009      

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Stocks rose in Europe and bonds and the yen dropped on signs that central banks are confident enough in the strength of the economic recovery to remove stimulus measures. The Australian and New Zealand dollars strengthened.

The Dow Jones Stoxx 600 Index of European stocks added 0.9 percent at 10:35 am in London and futures on the Standard & Poor's 500 Stock Index climbed 0.4 percent. The New Zealand dollar gained against all 16 of the world's major currencies while the Australian dollar advanced against 15. Greek government debt led the decline in European bonds, driving the yield on the 10-year note higher for a sixth day.

The Swiss National Bank said it will halt bond purchases designed to bolster the economy. Australian employment soared for a third month, while US jobless claims may drop for a sixth month to the lowest level since August 2008, economists said before a government report.

"If we're going to profit still from some economic recovery, then you don't want to be in the safe sectors, but in some of the more leveraged sectors," Florian Esterer, a money manager at Swisscanto Asset Management in Zurich, which oversees about $58 billion, said. Esterer said he's a "selective buyer" of Greek banks.

European shares advanced, snapping three days of declines. National Bank of Greece SA, the nation's biggest lender, advanced 1.7 percent in Athens trading, paring Wednesday's 6.6 percent plunge. Inditex, the world's largest clothing retailer, gained 2.1 percent in Madrid after posting third-quarter profit that beat analysts' estimates.

The MSCI Asia Pacific Index lost 0.8 percent. Mazda, Japan's fourth-largest automaker, slid 3.5 percent in Tokyo while Honda Motor Co lost 1.5 percent. Suzuki Motor Corp dropped 5.5 percent even after Volkswagen AG said it will buy a 19.9 percent stake in the Japanese automaker.

Trading in US futures indicated the S&P 500 may hold on to Wednesday's 0.4 percent advance. After rising as much as 64 percent from a 12-year low on March 9, the S&P 500 is little changed since mid-October.

The Dubai Financial Market General Index rose 7 percent, its steepest advance since February in a rebound from the 17 percent slide in the last three days. Emaar Properties PJSC, the developer of the world's tallest tower in Dubai, surged 14 percent after it abandoned a merger with three real-estate units of Dubai Holding LLC. The MSCI Emerging Markets Index was little changed.

Treasuries fall

US Treasuries declined before the sale of $13 billion of 30-year bonds, while German bunds fell as a report showed wholesale prices increased last month, adding to evidence the recovery in Europe's largest economy is taking hold.

Greek government bonds fell on concern following a credit- rating downgrade by Fitch Ratings on Dec 8. The bonds of other so-called peripheral euro-region countries, including Spain, Ireland and Portugal, also fell, widening the difference in yield over benchmark German bunds.

The yen declined against higher-yielding currencies after a government report showed companies in Australia added six times more jobs than economists estimated.

Japan's currency snapped three days of gains against the so-called Aussie and fell for a second day against the kiwi. Reserve Bank of New Zealand Governor Alan Bollard said he expects to begin raising interest rates in the middle of next year.

The Swiss franc was little changed against the euro and the dollar after the central bank left its target interest rate unchanged at 0.25 percent for a tenth month. The SNB began selling the franc against foreign currencies earlier this year in an effort to ward off deflation.

Source: China Daily
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