GLOBAL MARKETS-Asia stocks gain on hopes for euro zone plan
SINGAPORE, Sept 27 (Reuters) - Asian shares rose on Tuesday on hopes that euro zone officials will act to corral Greece's debt woes and prevent another full-blown banking crisis, but the euro failed to hold on to all its gains.
"Markets are getting more confident around some action plan in Europe, which is positive, but on the other side, markets are also looking for more policy easing from the ECB, which is negative," said Greg Gibbs, currency strategist at RBS in Sydney.
Asia Stocks Rebound From Lowest Since 2010 as Europe Seeks Debt Solution
Asian stocks rebounded from their lowest level since May 2010 after two days of gains in U.S. equities amid optimism that European leaders are closer to agreeing on ways to tame the region’s credit crisis. HSBC Holdings Plc (HSBA), Europe’s No.1 lender by market value, gained 1.9 percent in Hong Kong after a report the European Central Bank may restart covered-bond purchases and take further measures to ease monetary conditions. Canon Inc. (7751), a camera maker which depends on Europe for about a third of its sales, rose 2.5 percent in Tokyo. BHP Billiton Ltd. (BHP), the world’s biggest mining company, jumped 3 percent in Sydney after crude and copper prices advanced.
“There’s no doubt the markets are very oversold,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “There’s a good potential for a bounce and it then becomes about what follow-through reaction we see from Europe. The real issue is whether it’s a durable bounce or whether it’s a dead cat bounce.”
Record Dividends Lure Morgan Stanley to Asia as Stock Losses Rival Europe
Investors are getting paid more than ever to hold Asian stocks compared with the rest of the world as shares in the region fall almost as much as those in Germany and France. Equity declines, including last week’s 11 percent drop in the MSCI China Index, have pushed up dividend yields as much as 37 percent on Australia’s S&P/ASX 200 and 86 percent for the Chinese gauge, according to data compiled by Bloomberg. That helped send the MSCI Asia Pacific Index’s payout to 3.2 percent, exceeding the MSCI All-Country World Index by the most since at least 1995, the data show. Asian profits may rise 32 percent in the next two years, faster than the rest of the world, helping fund dividends and providing a margin of safety for investors betting the stocks will rebound. While bears say the region will prove just as risky as Europe and the U.S. should growth stall, Morgan Stanley is recommending companies that return cash to owners at a higher rate than U.S. Treasury bonds.
Stocks in U.S. Advance as Dow Average Caps Biggest Increase in One Month
U.S. stocks advanced, giving the Dow Jones Industrial Average its biggest increase in a month, amid speculation that European policy makers will act to prevent the region’s debt crisis from getting worse. Bank of America Corp. and JPMorgan Chase & Co. (JPM) rose more than 4.5 percent as the European Central Bank was said to consider restarting covered-bond purchases along with further measures to ease monetary conditions. Berkshire Hathaway Inc. (BRK/A) Class B shares added 8.6 percent as the company plans a stock buyback. Boeing Co. (BA) rallied 4.2 percent as the delivery of the 787 Dreamliner ended more than three years of delays. The Standard & Poor’s 500 Index added 2.3 percent to 1,162.95 at 4 p.m. in New York. The Dow average climbed 272.38 points, or 2.5 percent, to 11,043.86, rebounding from the biggest weekly decline since October 2008.
Record Tire Sales Rally Rubber on China-Japan Trend
Record demand for autos in China, the world’s largest market, and the biggest increase in Japanese vehicle production in three decades means tiremakers will make the most sales ever, reigniting a rally in rubber prices. China’s vehicle sales exceeded the combined global total of General Motors Co. and Volkswagen AG, the world’s top two automakers, in the first half, and Japanese output more than doubled in three months as factories reopened after the March earthquake. Tire demand will shrink rubber stockpiles to 12 percent of use in 2012, a four-year low, estimates Citigroup Inc. Prices may jump 18 percent to $5 a kilogram (2.2 pounds) by Dec. 31, a Bloomberg survey of 15 analysts and traders shows.
Expanding vehicle sales in China and other emerging markets will compensate for weakening demand in developed economies roiled by debt crises, giving carmakers their best year ever, according to JD Power & Associates, a research company. Bridgestone Corp. (5108), the biggest tiremaker, has more orders than it can handle, eroding rubber inventories just as rains delay harvesting in Thailand, the largest producer.
Rubber Surges Most in Six Months as Europe Seeks Solution to Debt Crisis
Rubber surged by the most in six months on expectation European leaders will act to prevent the region’s sovereign-debt crisis from getting worse, and amid speculation the German economy may avoid recession. February-delivery rubber jumped as much as 6.9 percent, the biggest gain since March 18, before trading at 319.8 yen a kilogram ($4,208 a metric ton) on the Tokyo Commodity Exchange at 11:14 a.m. local time. The March-delivery contract, listed on the bourse today, climbed to 325 yen after opening at 318.7 yen. Futures recovered from a one-year low reached yesterday after a euro-region central bank official said the European Central Bank is likely to debate restarting covered-bond purchases and may discuss interest-rate cuts to ease funding strains. Asian stocks extended a global rally while oil advanced for a second day, boosting the appeal of natural rubber.
Blast destroys Egypt gas pipeline to Israel, Jordan
CAIRO, Sept 27 (Reuters) - An explosion destroyed an Egyptian pipeline in Sinai that supplies Israel and Jordan with gas on Tuesday, security sources and witnesses said.
The security sources said the explosion happened west of the city of al-Arish. Witnesses said 15-metre high flames could be seen rising from the pipeline. The cause of the blast was not immediately known.
Brent crude near flat eyeing euro zone hopes
NEW YORK, Sept 26 (Reuters) - Oil prices were little changed in volatile trading on Monday as investors gauged skepticism about Europe's ability to tackle its debt crisis and optimism about efforts to deal with the region's problems.
"The market has come down a long way and most of the bad news seems now to be priced in," said Christopher Bellew, oil broker at Jefferies Bache. "Equities have stabilized."
NYMEX-Natural gas ends up on technical bounce, weather
NEW YORK, Sept 26 (Reuters) - Front-month U.S. natural gas futures ended higher on Monday after four straight losing sessions, backed by prospects for chillier weather next week and some technical buying after four straight losing sessions.
"We've been testing the lows, and everyone was expecting some (short) covering to happen, but we're moving into the (autumn) shoulder season, so demand is off and production is at record levels," said Eric Bickel, analyst at Summit Energy.
Euro Coal-Prices dip $1.50/T with commodities
LONDON, Sept 26 (Reuters) - Prompt physical coal prices continued to drift lower on Monday after steady falls for most of last week, due to a lack of end-user buying interest in Europe and Asian buyers waiting for lower prices.
"There's been quite a lot of spot activity in the Richards Bay market, especially for October - time's running out if you've got cargoes to move," one European trader said.
COMMODITIES-Crops up, ending 3 days of broad fall; gold down
NEW YORK, Sept 26 (Reuters) - Commodities snapped a three-day losing streak as oil ended flat on Monday. Agricultural markets rose, but metals extended their slide as gold fell to 2-1/2 month lows on record volatility.
"The liquidation, whether forced or self-determined, has yet to run its final course," said Gartman, whose comments on gold are closely followed by the market.
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