LONDON, Aug 5 — European stocks rose with US equity-index futures, boosted by earnings that exceeded analyst estimates and gains in commodities. Speculation the Federal Reserve will increase interest rates as soon as next month sent the dollar to a four-month high and pushed government bonds lower.
The Stoxx Europe 600 Index rose 0.8 per cent at 9.49am in London and US equity-index futures signalled shares will rise for the first time in four days. Russia’s rouble strengthened as oil advanced for a second day before US government data that analysts forecast will show crude stockpiles declined. The Bloomberg Dollar Spot Index climbed 0.2 per cent. Bonds slid from Australia to Britain as Treasuries extended a drop from yesterday.
Oil is rebounding after reaching its lowest level since January on Monday, helping quell losses among energy and mining stocks. Banks rose in Europe as Societe Generale SA posted its highest profit since the financial crisis. Investors will be looking at a private US jobs report for clues on the timing of an interest-rate increase after Fed Bank of Atlanta chief Dennis Lockhart said he would only endorse putting it off should there be a significant deterioration in economic data.
“We’ve had some decent results in banks and it’s turning out to be an all-right earnings season,” said William Hobbs, head of investment strategy at Barclays Plc’s wealth-management unit in London. “People are raising their bets after the Atlanta Fed governor Lockhart comments.”
SocGen trading
The Stoxx 600 climbed for the sixth time in seven days and all its industry groups up. With a 2.5 per cent gain, commodity producers are heading for their biggest jump since July 13.
Societe Generale jumped 8.4 per cent as an increase in stock volatility led to higher equity trading revenue at the region’s lenders. Legal & General Group Plc and Beiersdorf AG also reported earnings that topped projections.
The Standard & Poor’s 500 Index futures advanced 0.2 per cent. 21st Century Fox Inc and Time Warner Inc are among 24 S&P 500 companies reporting earnings today.
West Texas Intermediate rose 1 per cent to US$46.18 a barrel, extending a 1.3 per cent gain yesterday. Brent added 1.1 per cent to US$50.52.
Wheat for September delivery climbed 0.5 per cent to US$4.9575 a bushel amid concern that wet weather in the northern US plains could delay the harvest. Soybeans gained 0.5 per cent.
Currencies fall
South Korea’s won fell 0.6 per cent versus the dollar and Malaysia’s ringgit sank to the lowest level since 1998, leading declines in emerging markets. A gauge of 20 currencies dropped for a fifth day to a record low.
The offshore yuan slipped after the International Monetary Fund said China’s currency trails its global counterparts in major benchmarks and “significant work” in analysing data is needed before deciding whether to grant it reserve status.
Russia’s rouble rose for a second day as a report showed unexpected growth in the country’s purchasing managers’ index for services.
The MSCI Emerging Markets Index of stocks was little changed, slipping less than 0.1 per cent, with 325 stocks rising and 182 falling.
The Shanghai Composite Index fell 1.5 per cent, its fourth loss in five days, as turnover waned and concern grew that unprecedented government intervention is driving away investors. The value of shares traded on the index has fallen 65 per cent from this year’s high in June as trading halts, regulatory measures to curb bearish transactions and a suspension of initial public offerings discourages investors.
Hong Kong’s Hang Seng China Enterprises Index gained 0.7 per cent.
L&G profit
Legal & General climbed 2.3 per cent after the biggest manager of UK pension assets reported first-half profit that beat analysts’ estimates amid a jump in inflows. Beiersdorf, the maker of Nivea cream and Labello lip balm, rose 2.7 per cent.
Mediobanca SpA rose 2.1 per cent after raising its dividend. London Stock Exchange Group Plc gained 1.4 per cent as earnings increased. Ryanair Holdings Plc added 2.1 per cent after posting an increase in traffic for July.
ING Groep NV fell 3.8 per cent as the biggest Dutch lender posted net income that missed analysts’ projections. Neste Oyj lost 7.4 per cent as profit fell short of estimates.
Walt Disney Co dropped 5.6 per cent in German trading after posting third-quarter sales that fell short of analysts’ estimates. It also cut its forecast for cable TV profit. — Bloomberg
