Asian Stocks Advance With Metals on U.S. Economic Growth

By Michael Shanahan

Photographer: David Paul Morris/Bloomberg

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Oil fell and the dollar weakened from a more than five-year high as China’s shares declined on speculation regulators will cool the world’s best-performing market of the past month. European equities were little changed.
West Texas Intermediate fell 2.4 percent, paring yesterday’s 3 percent gain, as the Bloomberg Dollar Spot index declined for the first time in six days, dropping 0.2 percent. The Stoxx Europe 600 Index, Standard & Poor’s 500 Index and Dow futures were little changed at 7:20 a.m. in New York. The ruble weakened after a three-day advance. Copper dropped 0.3 percent.
The Dow Jones Industrial Average (INDU) climbed past 18,000 for the first time yesterday after a report showed the U.S. economy grew an annualized 5 percent. Stocks have been rallying since the middle of last week, when the Federal Reserve pledged patience over interest-rate increases. Initial jobless claims in the U.S. climbed to 290,000 in the week ended Dec. 20, economists
forecast before a report today.
“We’re still in the same game of global easing, very low interest rates and disinflation in parts,” said Veronika Pechlaner, who helps oversee $2.3 billion at Ashburton Ltd. in Jersey, the Channel Islands. “Valuations have gone from very attractive to more average levels, but they’re not that extended. I wouldn’t be too negative on equities.”
Financial markets in the U.S., Europe and most of Asia will be closed tomorrow for Christmas Day. Japan and mainland China will be open.

Growth Rate

The U.S. annualized growth rate was revised up from a previous estimate of 3.9 percent, and was the biggest advance since the third quarter of 2003. Separate data showed consumer spending rose more than previously estimated in the quarter, while orders for U.S. durable goods and purchases of new homes unexpectedly declined last month.
Oil is heading for the biggest annual decline since 2008 amid a global glut exacerbated by the highest U.S. output in more than three decades and a decision by OPEC to resist supply cuts. U.S. crude stockpiles probably shrank by 2.5 million barrels last week, a Bloomberg News survey shows before a report from the Energy Information Administration today.
WTI crude fell $1.37 to $55.75 a barrel, paring a 3.4 percent advance yesterday. Brent oil fell 2.6 percent to $60.10 a barrel in London.
The yen strengthened 0.2 percent to 120.42 per dollar after declining 3.5 percent in the previous five days. The dollar fell 0.2 percent to $1.2196 per euro after appreciating to $1.2165 yesterday, the strongest level since August 2012. The euro was little changed at 146.87 yen.

Treasury Yields

The yield on U.S. 10-year Treasuries was little changed at to 2.25 percent. It jumped 10 basis points yesterday, the most on a closing basis since November 2013. The rate on similar-maturity U.K. gilts rose for a second day, adding two basis points to 1.87 percent.
The Treasury market will close Dec. 25 in observance of the Christmas holiday, according to the Securities Industry and Financial Markets Association’s website. The group recommended an early close at 2 p.m. New York time today. Euro-area government bond markets were shut today and re-open Dec. 29.
Europe’s Stoxx 600 gauge rallied 6.4 percent in the past six days, its biggest jump since December 2011. It has recovered about two-thirds of the losses posted earlier this month and closed 2 percent below its almost seven-year high reached Dec. 5.

Volumes Slump

The volume of Stoxx 600 shares changing hands was 73 percent below the 30-day average today, data compiled by Bloomberg show.
Trading on the London Stock Exchange will end at 12:30 p.m. local time today, and NYSE Euronext’s European cash markets close 35 minutes later. The Madrid bourse will stop trading at 2 p.m. local time. Bourses in Germany, Switzerland, Italy and the Nordic countries are closed. U.S. equities markets also close early.
Smith & Nephew Plc jumped as much as 8.5 percent as people familiar with the matter said Stryker Corp. is planning a takeover offer for the U.K. medical-device maker, a bid that could come within weeks. HeidelbergCement AG added 1.7 percent after saying its selling its Hanson Building Products business, a maker of concrete and clay products, to Lone Star Funds for $1.4 billion
Futures (SPX) on the S&P 500 expiring in March were little changed after the index climbed to a record yesterday. It has gained 0.7 percent for December and 13 percent for the year.

Downgrade Threat

Developing-country stocks were little changed, with the MSCI Emerging Markets Index trading at 952.09, as 330 shares rose and 244 fell.
Russia’s Micex Index gained O.5 percent after Standard and Poor’s said it’s considering cutting the nation’s credit rating to junk for the first time in a decade.
The Shanghai Composite Index fell 2 percent after plunging 3 percent yesterday, as some brokerages in China raised the threshold for margin trading and short selling to control risks, the 21st Century Business Herald reported. Citic Securities Co. and Haitong Securities Co. both slumped 9 percent as data showed new stock-trading accounts dropped 29 percent last week.
Dubai’s benchmark DFM General Index climbed 2.5 percent, trimming the loss this quarter to 24 percent, while equities in Saudi Arabia gained 1.7 percent.
Copper declined for a third day and was at $6,311 a metric ton on the London Metal Exchange.
Wheat for March rose for a second day, advancing as much as 0.7 percent to $6.3975 a bushel on the Chicago Board of Trade. Russia, the world’s fourth-biggest exporter, said Dec. 22 it plans to introduce grain export duties.