Stocks Gain on Bernanke’s Comments, Euro Rises From 8-Year Low
By Clyde Russell and Masaki Kondo
June 8 (Bloomberg) -- Stocks in Asia and Europe snapped a two-day losing streak and U.S. index futures rebounded after Federal Reserve Chairman Ben S. Bernanke said the U.S. recovery remains intact. The euro strengthened from an eight-year low against the yen.
The MSCI Asia Pacific Index rose 0.4 percent to 110.10 as of 4 p.m. in Tokyo. The Stoxx Europe 600 increased 0.1 percent to 242.95. Standard & Poor’s 500 Index futures climbed 1 percent after the index declined 1.4 percent yesterday. The yen weakened to 109.88 per euro after touching 108.08 yesterday, the strongest since November 2001. Copper rose 0.5 percent to $6,130 a metric ton, advancing for the first time in seven days.
The recovery is “moderate-paced,” although unemployment may remain high, Bernanke said yesterday, boosting investor confidence after concern over Europe’s debt crisis drove benchmark U.S. stock indexes to seven-month lows. President Barack Obama’s stewardship of the U.S. economy has investors favoring the U.S., supplanting China and Brazil as the most attractive markets, according to a global quarterly poll of investors and analysts who are Bloomberg customers.
“Bernanke’s comment is positive for the stock market in that he is saying the economy is improving,” said Yoshinori Nagano, a senior strategist at Tokyo-based Daiwa Asset Management Co., which oversees the equivalent of $94 billion. “I don’t think we have to worry about the U.S. economic recovery. It’s unlikely to go wrong.”
Regional Indexes
Australia’s S&P/ASX 200 Index advanced 1.1 percent, the biggest gainer among regional indexes. Five stocks rose for every three that declined on the MSCI Asia index. The measure has slumped 15 percent from its high this year on April 15, dragging the average price of its companies to 14.1 times estimated profit -- near the lowest level since January 2009.
Shares of material producers climbed amid speculation global growth will revive metals demand. Rio Tinto Group, the world’s third-largest mining company, gained 1.7 percent to A$66.69 in Sydney. BHP Billiton, the world’s largest mining company, gained 1.2 percent to A$36.96.
Softbank Corp., the mobile-phone company with a monopoly on Japanese sales of the iPhone, climbed 2.3 percent after the Apple Inc. unveiled a new model yesterday.
The euro strengthened to $1.1969 from $1.1923 in New York yesterday, when it sank as low as $1.1877, the weakest since March 2006.
Aussie, Kiwi
The Australian dollar rose 1.7 percent to 75.313 yen and the New Zealand currency gained 1.4 percent to 61.06 yen, ending two days of losses, as Hungary denied it faces a Greece-like debt crisis, reviving demand for higher-yielding assets. Hungary’s government yesterday pledged to control its budget deficit and make structural changes to overhaul the economy.
The so-called Aussie strengthened against all 16 most- traded counterparts. The New Zealand dollar rallied amid speculation the nation’s central bank will raise interest rates from a record low on June 10.
“Hungary was obviously used as an excuse,” said Ray Attrill, global research director at Forecast Ltd. in Sydney. “Short-term speculative players are moving quickly” to buy back the Aussie and kiwi. “That’s why we are seeing more volatility,” he said.
Oil for July delivery rose for the first day in three, gaining 0.6 percent to $71.88 a barrel in electronic trading on the New York Mercantile Exchange.
The cost of protecting Japanese and Australian corporate bonds from default fell. The Markit iTraxx Japan index of credit swaps dropped 1 basis point to 149 basis points, according to Morgan Stanley. The Markit iTraxx Australia index fell 1 basis point to 140, according to Nomura Holdings Inc.
Prices fall when perceptions of credit-market conditions improve, and vice versa.
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