Global stocks ad­vance on stim­u­lus op­ti­mism

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

Global stocks climbed to a 4 1/2- year high amid spec­u­la­tion that cen­tral banks around the world will con­tinue with mea­sures to sup­port eco­nomic re­cov­ery. U.S. in­dex fu­tures were lit­tle changed, while Asian shares rose.

OC Oer­likon Corp. ral­lied to a four-year high af­ter the world's largest maker of tex­tile ma­chin­ery posted 2012 earn­ings that beat an­a­lysts' es­ti­mates. Deutsche Post AG in­creased the most in seven months af­ter re­port­ing fourthquar­ter re­sults.

The Stoxx Europe 600 In­dex (SXXP) ad­vanced 1.2 per­cent to 292.25 at 8:39 a.m. in Lon­don, the high­est level since Aug. 12, 2008. The bench­mark gauge com­pleted its ninth month of gains in Fe­bru­ary as the Euro­pean Cen­tral Bank pledged to pre­serve the euro and U.S. law­mak­ers reached a bud­get com­pro­mise. Fu­tures on the Stan­dard & Poor's 500 In­dex added 0.2 per­cent to­day, while the MSCI Asia Pa­cific In­dex climbed 0.6 per­cent to­day.

"We sug­gested yes­ter­day that the Fed Vice Chair­man Janet Yellen could hit the mar­ket with fur­ther dovish rhetoric, and she didn't dis­ap­point," Chris We­ston, chief mar­ket strate­gist at IG Mar­kets in Mel­bourne, wrote in an e-mail. "In the last few days, some of the key mem­bers of the Fed have pushed back and di­rected mar­kets that they aren't go­ing any­where any­time soon and the core of the Fed still feels the ben­e­fits of as­set pur­chases out­weigh the costs."

Fed­eral Re­serve Vice Chair­man Janet Yellen said yes­ter­day the U.S. cen­tral bank should press on with $85 bil­lion in monthly bond buy­ing. Yellen, the cen­tral bank's No. 2 of­fi­cial, echoed Chair­man Ben S. Ber­nanke's com­ment last week that the ben­e­fits of the Fed's his­tor­i­cally low in­ter­est rates and near- record $3.09 tril­lion bal­ance sheet out­weigh any risk of fi­nan­cial in­sta­bil­ity.

Sep­a­rately, Kikuo Iwata, a nom­i­nee for Bank of Ja­pan deputy gov­er­nor, said the cen­tral bank should buy longert­erm bonds to help it achieve a 2 per­cent in­fla­tion tar­get.

China plans to raise its bud­get deficit by 50 per­cent this year as the government cuts taxes and boosts mea­sures to sup­port con­sumer de­mand in the world's sec­ond-big­gest econ­omy. In the euro area, of­fi­cials in­di­cated that bud­get poli­cies may be eased af­ter a back­lash against aus­ter­ity plans. Eco­nomic strains may "jus­tify in a cer­tain num­ber of cases re­view­ing dead­lines for the correction of ex­ces­sive deficits," Euro­pean Union Eco­nomic and Mon­e­tary Com­mis­sioner Olli Rehn told re­porters late yes­ter­day.

Mean­while, French Fi­nance Min­is­ter Pierre Moscovici said deeper bud­get cuts in his coun­try are out of the ques­tion. OC Oer­likon rose 3.3 per­cent to 12.50 Swiss francs af­ter re­port­ing 2012 earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­za­tion of 547 mil­lion francs ($581 mil­lion), beat­ing the av­er­age an­a­lyst es­ti­mate that called for 524 mil­lion francs. The com­pany also pro­posed a div­i­dend of 0.25 francs a share, com­pared with the 0.23 francs an­a­lyst had pro­jected.

Deutsche Post in­creased 3.7 per­cent to 17.64 eu­ros. Europe's big­gest postal ser­vice said fourth-quar­ter net in­come amounted to 542 mil­lion eu­ros, top­ping the av­er­age 482 mil­lion- euro an­a­lyst forecast. The com­pany said it ex­pects 2013 earn­ings be­fore in­ter­est and taxes in the range of 2.70 bil- lion eu­ros to 2.95 bil­lion eu­ros. That com­pared with the av­er­age an­a­lyst es­ti­mate call­ing for 2.87 bil­lion eu­ros.

Glen­core In­ter­na­tional Plc (GLEN) added 2.3 per­cent to 378.45 pence af­ter the largest pub­licly traded com­modi­ties sup­plier posted full-year ad­justed net in­come of $3.06 bil­lion. Xs­trata Plc, which Glen­core is seek­ing to buy in a $33 bil­lion all-share bid, ad­vanced 2.9 per­cent to 1,131 pence. Elekta AB slid 4.6 per­cent to 91.25 kro­nor af­ter ad­just­ing its full-year forecast. The com­pany said it ex­pects sales to in­crease about 15 per­cent in lo­cal cur­ren­cies, com­pared with a pre­vi­ous pro­jec­tion for a growth of more than 15 per­cent.

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