The MSCI All-Country World Index advanced 0.7 percent as of 4:08 p.m. in Tokyo. China’s Shanghai Composite Index jumped 1.1 percent. Standard & Poor’s 500 Index futures rallied 0.9 percent. Copper climbed 0.9 percent in London, while crude added 0.3 percent in New York. The Dollar Index slipped 0.3 percent, retreating for a second day. The yen fell against all 16 major peers. The Australian and New Zealand currencies gained 0.4 percent versus the greenback. Treasuries slid for a second day.
Data today showed China’s industrial production slowed less than expected while inflation quickened in line with analysts’ forecasts, easing concern the government of the world’s second- largest economy will step up efforts to cool growth. Investor optimism may be capped as European Union officials prepare to meet in Brussels today amid disagreements over how to resolve the crisis in Greece, which had its credit rating cut by Standard & Poor’s yesterday, citing the prospects of default.
“More sensible investors know China will continue to grow,” said Khiem Do, Hong Kong-based head of multi-asset strategy at Baring Asset Management Ltd., which oversees about $10 billion. “At this point of the economic cycle, where China is experiencing bottle necks in the production of food stuffs and energy, a moderate slowdown is good news.”
Stocks Rebound
More than three shares gained for every one that declined on the MSCI Asia Pacific Index, helping the gauge to a 1.1 percent advance. The Stoxx Europe 600 Index climbed 0.8 percent in early trading. Japan’s Nikkei 225 Stock Average added 1.1 percent, South Korea’s Kospi index jumped 1.4 percent and Taiwan’s Taiex index climbed 1.3 percent.
The Shanghai Composite gained the most since May 31, led by Poly Real Estate Group Co.’s 6.8 percent jump. Inflation accelerated to 5.5 percent in May, while production rose 13.3 percent last month, faster than the 13.1 percent forecast. Separate data also showed May home sales transaction value rose 17 percent from April and fixed-asset investment excluding rural households expanded 25.8 percent in the first five months.
“This has sort of given the market comfort that inflation may be topping, which is why you see quite a positive reaction in the market currently,” said Goh Puay Yeong, a currency strategist for Credit Suisse Group AG. “More importantly, the other growth data is strong and much higher than expected, especially for industrial output.”
Tepco, Hankook
Tokyo Electric Power Co. jumped 25 percent after the company said it’s preparing compensation for victims of the Fukushima Dai-Ichi nuclear plant disaster after Japan’s cabinet today approved a bill to help the utility meet payments. Tepco also gained after the stock exchange clamped down on the short- selling of the stock.
Hankook Tire Co., South Korea’s largest tiremaker, rose 9 percent, erasing yesterday’s 8.2 percent slump. Korea Investment & Securities Co. said in a report that the decline, triggered by concern about a recall in China, was “overdone.”
The S&P 500 climbed 0.1 percent yesterday, as U.S. stocks rebounded from six weeks of losses. Yields on 10-year Treasuries climbed two basis points to 3.01 percent amid declining investor appetite for safe-haven assets.
Sales at retailers probably fell 0.5 percent in May, the first drop in 11 months, according to the median forecast of 63 economists surveyed by Bloomberg News before the Commerce Department releases the data today. A separate report is forecast to show producer-price inflation slowed.
Aussie, Won
The Aussie rose 0.4 percent to $1.0650, reversing an earlier loss of as much as 0.3 percent. The kiwi gained 0.4 percent to 81.85 U.S. cents and South Korea’s won strengthened 0.3 percent to 1,082.60 per dollar.
The dollar traded at $1.4467 per euro from $1.4413 yesterday, while the yen slid 0.6 percent to 116.36 against Europe’s 17-nation currency. The euro has lost 1.1 percent in the past week, according to Bloomberg Correlation-Weighted Currency Indexes, on concerns over whether European officials will agree on a new aid package for Greece.
An EU agreement is critical to Greece’s solvency because the International Monetary Fund can’t pay its share of a 12 billion-euro ($17.3 billion) bailout payment in July unless a plan is in place to plug a 2012 financing gap of about 30 billion euros. S&P cut Greece’s long-term sovereign credit ratings three levels to CCC, the world’s lowest credit rating, saying the nation is “increasingly likely” to face a debt restructuring.
‘Weigh Heavily’
“A further pronounced procrastination will weigh heavily on the euro, even though the longer term likelihood is that they come up with a resolution on further bailout packages for Greece,” said Timothy Riddell, senior strategist at ANZ Banking Group Ltd. in Singapore.
Copper for three-month delivery increased 0.9 percent to $8,993.50 a metric ton on the London Metal Exchange. Cash silver gained 1 percent to $35.13 an ounce, rebounding from a two-day, 7.4 percent plunge.
Crude climbed 0.3 percent to $97.59 a barrel on the New York Mercantile Exchange, after earlier dropping as much as 0.8 percent to $96.55. Futures retreated 2 percent yesterday to the lowest settlement since May 17. An Energy Department report tomorrow may show U.S. gasoline supplies increased by 1 million barrels from 214.5 million, according to the median of eight analyst estimates in a Bloomberg News survey. Crude stockpiles probably fell 1.75 million barrels, the survey shows.
--With assistance from Satoshi Kawano and Yoshiaki Nohara in Tokyo and Ron Harui, Kristine Aquino, Yudith Ho and Alexander Kwiatkowski in Singapore. Editors: Nick GentleTo contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Weiyi Lim in Singapore at wlim26@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
