Azernews.Az

By Bloomberg

Commodity producers led European stocks higher and U.S. equity-index futures rose after China cut banks’ reserve requirements, boosting speculation demand for raw materials will increase. Currencies of resource-rich nations rose, while bonds gained from Italy to Spain.

The Stoxx Europe 600 Index climbed 0.6 percent at 10:13 a.m. in London. Standard & Poor’s 500 Index futures added 0.5 percent. South Africa’s rand and the Canadian dollar led gains among the 17 major currencies tracked by Bloomberg. Oil rose for the seventh time in eight days and copper climbed 0.5 percent. The yield on 10-year Italian bonds fell five basis points to 1.43 percent and Spain’s rate dropped to 1.41 percent. Chinese shares retreated from levels last seen in 2008.

The central bank in China, the world’s biggest consumer of energy and industrial metals, lowered the amount of cash lenders must set aside as reserves by the most since 2008 to support the economy amid the slowest expansion in six years. European shares rebounded from the biggest weekly decline this year and S&P 500 futures signaled the gauge will rally after falling the most in three weeks on Friday.

“The biggest move since 2008 is a clear statement,” Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a report. “China have tried hard to do the right things with regards to reforms. But it seemed to be sending growth to uncomfortably low levels.”

Europe’s equity gauge fell 1.8 percent on Friday, the most since January. Miners posted the best performance among 19 Stoxx 600 groups after the reserve-ratio cut by China. BHP Billiton Ltd. and Rio Tinto Group gained at least 1.6 percent.

Telenet Group Holding NV rallied 4.4 percent after agreeing to buy Royal KPN NV’s Belgian mobile-phone business Base for 1.33 billion euros ($1.43 billion). KPN advanced 2.1 percent.

Emerging Markets

The MSCI Emerging Markets Index fell for a second day, losing 0.7 percent. The Shanghai Composite Index slid 1.8 percent and the Hang Seng China Enterprises Index of mainland shares listed in Hong Kong lost 3.2 percent, the most in three months.

The reserve-requirement ratio will be cut 1 percentage point from Monday, the People’s Bank of China said. The China Securities Regulatory Commission announced measures on Friday to clamp down on the use of shadow financing for equity purchases and increase the supply of shares available for short sellers.

Chinese shares swung between gains and losses for much of early trading as investors weighed authorities’ steps to curb speculative trading against the cut in reserve requirements. The Shanghai gauge has jumped 79 percent in the past six months, the most among 93 benchmark indexes globally.

Widening Deficit

India’s rupee fell to a one-week low as a slump in exports widened the nation’s trade deficit to a four-month high. The Sensex gauge of stocks dropped to this month’s low.

The ruble gained 0.7 percent, extending a fifth weekly advance, on higher oil. The dollar-denominated RTS Index of equities climbed 1.6 percent.

South Africa’s rand rallied 0.4 percent to 12.0206 per dollar and Canada’s currency rose 0.4 percent to C$1.2198 per U.S. dollar. The euro weakened against all but one of its 16 major counterparts, declining 0.5 percent to $1.0757.

European Central Bank President Mario Draghi said in Washington Saturday that while the situation is “urgent,” it’s premature to speculate about a Greek exit from the currency union, and investors shouldn’t bet against the euro.

Italy’s bonds rose for the first time in three days as government securities advanced across the region. Portugal’s 10- year yield declined six basis points to 1.96 percent.

Germany’s 10-year bund yield slipped one basis point to 0.07 percent and the rate on similar-maturity Treasury notes was little changed at 1.87 percent.

Commodities Rise

The Bloomberg Commodity Index advanced 0.2 percent. West Texas Intermediate crude climbed 0.9 percent to $56.24 a barrel in New York, close to the highest settlement for this year. Brent added 0.7 percent to $63.86.

Rigs targeting oil in the U.S. decreased for a 19th week through April 17 to the fewest since 2010, according to Baker Hughes Inc. U.S. oil production fell by 20,000 barrels a day to 9.4 million a day in the week to April 10, according to the Energy Information Administration.

Copper for delivery in three months on the London Metals Exchange rose 0.4 percent to $6,081 a metric ton, while lead and zinc both climbed to the highest this year. Aluminum gained 1 percent and gold advanced 0.2 percent.