- Emerging markets shares, currencies rise as tech stocks gain
- Mongolia’s tugrik extends slide as interest rate hiked to 15%
European shares rose for the first time in a week and emerging markets advanced as a gauge of commodities climbed for the sixth straight day and minutes of the Federal Reserve’s last meeting damped prospects for a U.S. interest-rate hike.
Miners led gains on the Stoxx Europe 600 Index and energy producers also rallied after Brent crude traded above $50 a barrel, while an MSCI index of emerging-market equities advanced to a one-year high. The dollar weakened versus almost all of its major peers following the release of the Fed record, which showedofficials saw little risk of a sharp uptick in inflation and pushed odds of a rate increase this year back below 50 percent. The pound surged on a jump in U.K. retail sales.
Speculation that central banks in the world’s biggest economies will remain accommodative amid uneven growth propelled global equities to a one-year high this month and sent the dollar tumbling. The Fed minutes struck a more dovish tone when compared with comments this week from New York Fed chief William Dudley, who flagged the prospect of a rate hike as soon as next month. Dudley will hold a press briefing on Thursday in New York and his San Francisco counterpart, John Williams, is also due to speak.
“Central banks are going to remain quite accommodating,” said Benno Galliker, a trader at Switzerland’s Luzerner Kantonalbank AG. “I am optimistic about the market overall -- there is no other option but equities at the moment, as rates are going down and down and down.”
Stocks
The Stoxx 600 added 0.5 percent at 8:22 a.m. in New York, with all but three industry groups rising.
Vestas Wind Systems A/S surged 9.5 percent after increasing its annual guidance. Nestle SA, which has the highest weighting in the Stoxx 600, advanced 1 percent as Chief Executive Officer Paul Bulcke forecast pricing will rebound in the coming months, after the world’s biggest food company reported the slowest first-half sales growth since 2009.
S&P 500 futures slipped 0.1 percent, after shares eked out gains on Wednesday following the release of the Fed minutes. Among stocks moving in premarket New York trading, Wal-Mart Stores Inc. rose 3 percent after increasing its annual earnings forecast as second-quarter results topped analysts’ estimates. Cisco Systems Inc. fell 1.3 percent in German trading after the biggest maker of equipment that runs the Internet announced plans to cut about 7 percent of its workforce.
As well as jobless claims data, investors will look to earnings reports from companies including Wal-Mart for indications of the state of the U.S. economy. Fewer than 30 of the S&P 500’s companies have yet to report. Of those that have already done so, 78 percent beat profit projections and 56 percent topped sales predictions.
The MSCI Emerging Markets Index rose 0.6 percent, led by technology stocks. Tencent Holdings Ltd. jumped to an all-time high after a 47 percent surge in profit beat analysts’ estimates. Samsung Electronics Co. also climbed to a record. The two stocks have the biggest weightings in the MSCI equity benchmark.
Japan’s Topix index dropped 1.6 percent, while the Philippine Stock Exchange Index erased losses after the government reportedbetter-than-expected economic growth for the second quarter.
Currencies
The Bloomberg Dollar Spot Index fell 0.2 percent, approaching a three-month low. It posted a 0.2 percent gain on Wednesday, having been up as much as 0.5 percent ahead of the Fed minutes’ publication.
Britain’s pound was the biggest winner against its U.S. counterpart, climbing after a report showed U.K. retail sales jumped more than economists forecast in the month after Britain voted to quit the European Union. Sterling strengthened 0.8 percent to $1.3151.
The euro rose 0.3 percent to $1.1318 as policy-meeting minutes showed European Central Bank officials “widely” agreed that their immediate reaction to the outcome of the U.K.’s referendum shouldn’t fuel excessive speculation about more stimulus. Australia’s dollar climbed 0.2 percent after a report showed Australia’s unemployment rate unexpectedly fell to 5.7 percent in July.
The MSCI Emerging Markets Currency Index gained as much as 0.4 percent after falling 0.5 percent on Wednesday. The Malaysia’s ringgit was the biggest gainer, rising 0.5 percent. Mongolia’s tugrik fell for a record 24th day even as the central bank raised its key rate to 15 percent from 10.5 percent.
Commodities
The Bloomberg Commodity Index was set for the most enduring rally in more than two months as the dollar weakened.
West Texas Intermediate crude rose for a sixth day, the longest advance in more than a year, as U.S. crude and gasoline stockpiles dropped from the highest seasonal level in at least two decades. Oil added 0.6 percent to $47.07 a barrel after gaining more than 12 percent over the previous five sessions. Brent added as much as 0.4 percent to trade above $50 for the first time in more than a month.
Industrial metals also rose, with copper gaining 1.3 percent to $4,836 a metric ton and nickel adding 1.3 percent.
Bonds
The yield on Australia’s 10-year bonds fell four basis points to 1.87 percent, while that on similar-maturity notes in Germany declined two basis point to minus 0.08 percent.
Yields on Ukrainian bonds maturing Sept. 2019 climbed 18 basis points to 8.37 percent, the highest on closing basis since June 28, after Ukrainian President Petro Poroshenko said in a televised speech the probability of an escalation in the conflict with Russia remains “very significant.”