Asia shares, euro rally on EU summit
TOKYO, Oct 27 (Reuters) - Riskier assets across the board from equities to oil and the euro rallied after European leaders agreed to boost the region's rescue fund and struck a deal on a 50 percent writedown for private bondholders on their Greek debt.
"The blueprint is out, but it's coming in dribs and drabs and not as clear as we thought it will be," said Jonathan Barratt, managing director at Commodity Broking Services, adding that it also did not fully address the issues.
Asia Stocks Jump to Seven-Week High on Europe Debt Agreement, China Easing (Bloomberg)
Asian stocks rose, sending the benchmark index toward the highest close in almost eight weeks, as European leaders and bondholders agreed a write down of Greek debt and boosted the region’s rescue fund to 1 trillion euros ($1.4 trillion). Chinese stocks surged on speculation the country may soon ease monetary policy. Esprit Holdings Ltd., a clothier that gets 79 percent of its revenue in Europe, jumped 6.2 percent in Hong Kong. Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest lender, rose 5.1 percent, reversing earlier losses. Komatsu Ltd., Japan’s largest construction machinery maker, gained 4 percent after orders for U.S. durable goods excluding transportation equipment increased. Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, jumped 5.3 percent.
“There’s a sense of achievement in terms of agreement among nations, and now the question is how banks and people in Greece will resist the implementation of the plans,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s third-largest lender by market value. “Stocks have risen, pricing in this kind of development.”
European Stocks Climb on Debt-Crisis Deal (Bloomberg)
European stocks rallied to the highest in 12 weeks after the region’s leaders agreed to expand a bailout plan to halt the sovereign debt crisis. Asian shares and U.S. index futures also climbed. BNP Paribas SA, France’s biggest bank, and Deutsche Bank AG, Germany’s largest, surged more than 8 percent as policy makers boosted the firepower of the European rescue fund to 1 trillion euros ($1.4 trillion). PPR SA, the French owner of the Gucci luxury-goods brand, jumped 5.7 percent after third-quarter sales surpassed analyst estimates. Royal Dutch Shell Plc climbed after saying third-quarter earnings doubled. The Stoxx Europe 600 Index surged 2.3 percent to 246.36 at 8:57 a.m. in London, the highest since Aug. 4. The index has rallied 15 percent from this year’s low on Sept. 22 amid growing speculation that policy makers would agree on a solution to the region’s debt woes.
Emerging Stocks Rise to Six-Week High on Europe Debt Plan, China
Oct. 27 (Bloomberg) -- Emerging-market stocks rose the highest in six weeks as European leaders agreed on a plan to expand a bailout fund to stem the region’s debt crisis and on speculation the Chinese government will ease monetary policies to boost the economy. The MSCI Emerging Markets Index gained 1.5 percent to 975.05 at 1:41 p.m. Singapore time, set for the highest close since Sept. 16. The gauge is up for a fifth day. The Hang Seng China Enterprises Index climbed 3.9 percent, extending gains after Premier Wen Jiabao said this week the government may fine-tune its economic policies as needed. The Kospi Index increased 1.3 percent after the operator of South Korea’s bourse said it will temporarily waive commissions for brokerages.
French President Nicolas Sarkozy said the euro region’s bailout fund will be leveraged by four to five times, and investors have agreed to a voluntary writedown of 50 percent on Greek debt. Sarkozy is due to speak to Chinese leader Hu Jintao today and said he’d welcome support from the Asian nation in the bailout effort. “Even though the discussion seems to be taking longer than what many people may like, that phase of panic is over,” said Erwin Sanft, deputy head of Asian equities research at BNP Paribas SA in a Bloomberg Television interview in Hong Kong. “Policy makers in the eurozone have come together. People can see the beginning of a solution to the problems.” MSCI’s developing-nation index has dropped 15 percent this year, with companies on the gauge trading at 10.4 times estimated earnings. That’s less than the four-year average multiple of 11.5 times, according to data compiled by Bloomberg.
Options traders are making more bets than any time since 2009 that emerging market equities will climb after valuations fell to the lowest levels in three years.
FOREX-Euro hits 7 week high as Europe hammers out deal
TOKYO, Oct 27 (Reuters) - The euro hit a seven-week high on Thursday after EU leaders and banks reached a deal on a 50 percent writedown for private bondholders on their Greek debt and made progress in other areas crucial to stemming the debt crisis.
The euro jumped 0.6 percent to $1.3995, breaking through a wall of orders and charging past stop-losses on the way, also bolstered by the EU's progress on bank recapitalisation and its moves to scale up the size of the euro zone's 440 billion euro ($600 billion) bailout fund.
Wheat jumps 1.7 pct, corn rebounds on EU rescue plan
SINGAPORE, Oct 27 (Reuters) - U.S. wheat rose 1.7 percent, while corn firmed following its biggest drop in a month as a move by European leaders to boost the region's rescue fund sparked a broad-based rally in the commodity markets.
"We are seeing a strong session across all risk assets, including agricultural commodities, and it appears to be linked to the optimism that the markets have displayed following the European summit," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.
Canada Wheat Board to fight Ottawa in court
WINNIPEG, Manitoba, Oct 26 (Reuters) - The Canadian Wheat Board said on Wednesday it will launch legal action to stop the Conservative government from ending the CWB's generations-old grain marketing monopoly, though a politician who supports the board's fight says it has little chance of succeeding.
Agriculture Minister Gerry Ritz said however that the challenge could set back efforts to revamp the Wheat Board to compete effectively for crops next year in an open market.
Ivory Coast expects record 1.6 mln T cocoa this season
ACCRA, Oct 26 (Reuters) - Ivory Coast authorities are expecting to set a new record of 1.6 million tonnes of cocoa output for the 2011/12 season, a senior government cocoa adviser said on Wednesday.
"Our new season ... is going well. The forecast is 1.6 million (tonnes) after the preliminary assessment -- that is what we are working towards," Malick Tohe, special adviser on cocoa to Prime Minister Guillaume Soro, told Reuters on the sidelines of the World Cocoa Foundation conference in neighbouring Ghana.
Brazil CS sugar output trails last season by 3 pct
BRASILIA, Oct 26 (Reuters) - Sugar output from Brazil's center south cane crop totaled 27.7 million tonnes from the start of the season through Oct. 16, down 3 percent from a year ago helped by an unexpected rise in yields late in the season, cane industry association Unica said on Wednesday.
Cane crushing in the region totaled 436.5 million tonnes, down 7 percent from the same period last year. Ethanol production fell 16 percent to 18.2 billion liters.
Cargill confirms clubroot in Saskatchewan canola
Oct 26 (Reuters) - Cargill Inc said on Wednesday that it has confirmed the presence of clubroot disease in canola plants at two locations in north central Saskatchewan.
Cargill noticed symptoms of the disease while evaluating plants in the western Canadian province and sent them to an independent lab for analysis.
Oil gains more than $1 on EU rescue plan
SINGAPORE/SEOUL, Oct 27 (Reuters) - Oil prices rose by more than a dollar after European leaders agreed to boost the region's rescue fund, raising hopes that the euro zone debt crisis will be contained.
"I attribute the edging up of oil futures to some apparent progress in the discussions in Europe regarding the European debt crisis," said Victor Shum of Purvin & Gertz.
Argentina to oil, mine firms: Sell all dollars here
BUENOS AIRES, Oct 26 (Reuters) - Argentina has ordered oil, gas and mining companies to cash in all their export revenue on the local foreign-exchange market, moving strongly to protect dwindling central bank reserves as capital flight surges.
The surprise rule change on Wednesday puts the industries on equal footing with powerful grains exporters and could cool investment at a time when Argentina's trade surplus is shrinking and its energy supplies are overstretched.
Colombia increases security at largest oil field
BOGOTA, Oct 26 (Reuters) - Colombia sent 400 additional police to guard Colombia's largest oil field after Canada's Pacific Rubiales threatened to suspend operations there unless reinforcements were sent to help quell a violent demonstration.
"Security forces have been reinforced by way of the National Police. A general has been sent to take command of police activities with very specific instruction to arrest anyone who breaks the law," Energy Minister Mauricio Cardenas told Reuters on Wednesday.
US Aluminum premiums climb as demand picks up
NEW YORK, Oct 26 (Reuters) - The U.S. primary aluminum market is seeing a surprisingly strong burst in spot purchases at the start of the quarter, with supplier order books filling up even as volatile financial markets dispel recovery hopes.
The demand pickup has caught physical market players by surprise, many of whom expected the seasonally slower fourth quarter to close out 2011 with a whimper. So far, it is shaping up to be a busier-than-normal quarter.
Japan Sept rolled copper output down 6.8 pct yr/yr
TOKYO, Oct 26 (Reuters) - Japan's output of rolled copper products fell to 70,092 tonnes in September on a seasonally adjusted basis, down 6.8 percent from a year earlier, preliminary data showed on Wednesday.
The Japanese appetite for copper, often seen as a gauge of economic activity and already weak in the wake of the global financial crisis, took a fresh beating after the March 11 earthquake prompted user industries to reduce domestic output.
China steel, metals firms warn tightening may have gone too far-FT
Oct 27 (Reuters) - Chinese steel and base metals producers are worried about the risk of payment defaults from customers and delayed orders because of Beijing's monetary tightening which they warned may have gone too far, the Financial Times reported on Thursday.
Baoshan Iron and Steel , China's second-biggest steelmaker in terms of output, said its customers were pushing back scheduled deliveries "due to declining economic growth and tightening credit," according to the newspaper.
Iron ore extends losses as China demand slows
SINGAPORE, Oct 26 (Reuters) - Iron ore extended losses on Wednesday and was on course for its steepest ever weekly price slide as slowing growth in top consumer China curbed steel prices and hit demand for the steel-making raw material.
China's appetite for iron ore has weakened along with slowing demand for steel from its construction sector, pushing down prices for iron ore by about 30 percent since early September.
Japan steel firms cut outlook as market worsens
TOKYO, Oct 26 (Reuters) - Japan's top steelmakers, Nippon Steel Corp and JFE Holdings Inc , slashed their full-year profit outlooks by about 20 percent on Wednesday, hit by a rapid deterioration in Asia's steel market after booking quarterly earnings about half of last year's levels.
Ebbing demand in China, the world's biggest consumer and producer, and an uncertain global economy, are weighing heavily on the profits of Asian steelmakers already reeling from a supply glut and sagging regional prices.
China iron ore destocking could take months-Fortescue
Oct 26 (Reuters) - Global iron ore prices, down nearly 30 percent since early September, could take months to recover as Chinese steel mills work off inventories, Australian miner Fortescue Metals Group said on Wednesday
China is the world's largest buyer of iron ore, gobbling up some 600 million tonnes annually, or about two thirds of the global seaborne iron ore market controlled by mega-producers Vale , Rio Tinto and BHP Billiton
China steel, metals firms warn tightening may have gone too far-FT
Oct 27 (Reuters) - Chinese steel and base metals producers are worried about the risk of payment defaults from customers and delayed orders because of Beijing's monetary tightening which they warned may have gone too far, the Financial Times reported on Thursday.
Baoshan Iron and Steel , China's second-biggest steelmaker in terms of output, said its customers were pushing back scheduled deliveries "due to declining economic growth and tightening credit," according to the newspaper.
METALS-Copper up on Europe rescue plan, China optimism
SHANGHAI, Oct 27 (Reuters) - Copper rose on Thursday after euro zone leaders agreed to boost the region's rescue fund and on optimism that top consumer China may move towards looser monetary policy.
Prices were also supported by labour disputes at two Freeport mines that led to a declaration of force majeure at the company's Grasberg mine on Wednesday.
PRECIOUS-Gold hits one-month high on EU debt plan
SINGAPORE, Oct 27 (Reuters) - Gold prices rose to their highest in more than a month on Thursday after European leaders agreed on a plan to contain the region's debt crisis, lifting sentiment in the financial markets, while a weaker dollar helped.
Euro zone leaders reached agreement on a comprehensive package of measures to tackle the bloc's debt crisis after an EU summit that ran into the early hours of Thursday, spurring the euro to a seven-week high against the dollar.
Gold hits one-month high on EU debt plan
SINGAPORE, Oct 27 (Reuters) - Gold prices rose to their highest in more than a month after European leaders agreed on a plan to contain the region's debt crisis, lifting sentiment in the financial markets, while a weaker dollar helped.
"The market is back to normal," said Dick Poon, manager of precious metals at Heraeus in Hong Kong, "The equity market has stabilised on hopes in Europe, and money is flowing back to precious metals."
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