Global Stocks Gain as Commodities Advance After Dollar's Tumble
- Greenback steadies after depreciating 1.7% on Wednesday
- Copper futures gain as oil back above $32 burnishes sentiment
Stocks gained around the world as a selloff in the dollar underpinned a resurgence in crude oil.
A gauge of European shares rose for the first time this week, led by mining and energy companies. Gains were tempered by a plunge in Credit Suisse Group AG shares after the company swung to a quarterly loss. U.S. index futures advanced. The euro extended its 1.7 percent surge on Wednesday, when the dollar tumbled against a basket of currencies. South Korea’s won rallied the most in three months. U.S. oilextended gains above $32 a barrel after jumping 8 percent in the previous session.
"The selloff in the U.S. dollar is supportive of commodities,” said Scott Schuberg, chief executive officer at Rivkin Securities, a brokerage in Sydney. “We’ve been trading under conditions that’s been fairly gloomy. The outlook for China has been gloomy for years now. I don’t really think that there’s too much negative sentiment that could be piled on to this market. Investors should start buying slowly.”
The dollar’s retreat was sparked by data showing the U.S. services sector grew at the slowest pace in nearly two years, underscoring the vulnerability of the American economy to unsteadiness abroad. The report tipped the fixed-income market’s balance closer toward zero rate hikes by the Federal Reserve this year, amid prospects central banks from Asia to Europe will act to quell the turmoil that’s roiled markets in 2016. The greenback’s drop helped boost the price of crude oil, along with speculation OPEC and other oil producing nations have agreed to an emergency meeting on market volatility.
China set a range for its economicgrowth target for the first time in 20 years, saying late Wednesday that the economy would likely expand 6.5 percent to 7 percent this year, slower than last year’s goal of about 7 percent. Gyrations in Chinese equity and currency markets unsettled global trading at the start of the year, with regulators’ response to the volatility fueling anxiety over their ability to manage the slowing economy.
Stocks
The Stoxx Europe 600 Index rose 0.3 percent at 8:14 a.m. London time. Credit Suisse slumped 9.2 percent after posting a loss in the fourth quarter as it wrote off billions of dollars in goodwill, set aside provisions for litigation and booked a multi-billion-dollar charge in its main trading unit. The bank gave up 5.83 billion Swiss francs ($5.8 billion).
Contracts on the Standard & Poor’s 500 Index added 0.2 percent after the gauge climbed 0.5 percent last session.
The MSCI Asia Pacific excluding Japan Index rose 0.7 percent, with Australia’s S&P/ASX 200 Index up 2.1 percent. BHP Billiton Ltd., the world’s biggest mining company, rallied for the first time in four days. The Hang Seng China Enterprises Index, a gauge of mainland Chinese stocks listed in Hong Kong, climbed 1.5 percent, while the Shanghai Composite Index advanced 1.5 percent. South Korea’s Kospi index gained 1.4 percent.
The Topix fell 1.2 percent to its lowest level in more than a week.
Currencies
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, was little changed after sliding as much as 1.9 percent last session.
The yen gained 0.1 percent to 117.73 per dollar following a 1.7 percent surge, while the euro traded at $1.1118.
The won strengthened 1.3 percent after falling every other day this week. The ringgit climbed 1.6 percent, buoyed by crude’s recovery given Malaysia is Asia’s only major net exporter of oil. A Bloomberg gauge of emerging-market currencies climbed 0.2 percent after rallying 1.2 percent on Wednesday.
Commodities
West Texas Intermediate crude advanced 0.3 percent to $32.39 a barrel. Wednesday’s rebound followed oil’s worst two-day slump in seven years. Stockpiles expanded last week by 7.8 million barrels to more than 500 million, data Wednesday showed.
Analysts are projecting oil prices will soar more than $15 by the end of 2016. WTI will reach $46 a barrel during the fourth quarter, while Brent in London will trade at $48 in the same period, the median of 17 estimates compiled by Bloomberg this year show.
Copper futures climbed 0.6 percent, while gold was little changed.
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