Equities rise on US data, cbank hopes; euro slides vs yen, dollar

Oil prices little changed; gold decline continues

US

NEW YORK, Feb 28, (Agencies): Global equity markets and Brent crude oil rose on Thursday, pulled higher by encouraging US economic data and renewed confidence that major central banks will keep taking steps to support their economies.

A drop in new US claims for jobless benefits last week and a sharp rise in factory activity in the Midwest in February added to recent data that suggests the US economy is improving.

The US Commerce Department said gross domestic product rose 0.1 percent in the fourth quarter — reversing a previous reading showing a contraction, but less than the 0.5 percent gain forecast by analysts in a Reuters poll.

Investors, however, largely shrugged off the anemic economic growth of the fourth quarter to focus on a brighter picture going forward.

The US equity market lacks catalysts as it digests its recent move higher, according to Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey, where he helps oversee $120 billion in assets under management.

In Europe, the FTSEurofirst 300 index of top regional shares rose 0.9 percent to close at 1,171.47.

MSCI’s all-country world equity index rose 0.52 percent to 354.64.

In oil markets, Brent crude for April delivery gained 46 cents to $112.33 a barrel.

In contrast, US oil for April delivery slipped 20 cents to $92.56 a barrel.

Gold headed toward its longest run of monthly declines in more than 16 years as an improved economic backdrop and reduced concerns about inflation blunted its appeal to investors.

The dollar rose against the euro and yen as investors embraced its perceived safety against the backdrop of the Italian stalemate and less than 24 hours before automatic federal spending cuts are enacted in the United States.

US stocks edged higher on Thursday with investors hard-pressed to lift indexes to multi-year highs despite strong economic data.

The US economy ticked up in the fourth quarter, reversing an earlier estimate showing contraction, and a drop in new claims for unemployment benefits last week added to a string of data that suggests the economy improved early this year.

The Dow was within striking distance of a record high after a more than 7 percent year-to-date run. The Dow transports index , seen as a bet on future growth, is up almost 13 percent this year and hit a record intraday high Thursday before turning slightly negative.

The Dow Jones industrial average rose 14.79 points or 0.11 percent, to 14,090.16, the S&P 500 gained 3.12 points or 0.21 percent, to 1,519.11 and the Nasdaq Composite added 9.13 points or 0.29 percent, to 3,171.39.

The Dow’s intraday record, set Oct 11, 2007, stands at 14,198.10.

The S&P 500 has gained more than 2 percent in the past three sessions.

Equity markets suffered steep losses earlier in the week on concerns over the impact of an Italian election on the European economy, but bounced back on strong data and recent comments by Federal Reserve Chairman Ben Bernanke that showed continued support for the Fed’s economic stimulus policy.

J.C. Penney Co Inc slumped 17.9 percent to $17.38 after the department store reported a steep drop in sales on Wednesday. Groupon Inc also slumped on weak revenue, with the stock off 20 percent at $4.76.

Cablevision shares tumbled nearly 10 percent after the cable provider took a $100 million hit on costs related to Superstorm Sandy and posted deeper video customer losses than expected.

Mylan Inc shares were on track to close at their highest ever after the generic drugmaker posted a 25 percent rise in fourth-quarter profit and said it will buy a unit of India’s Strides Arcolab Ltd Shares were last up 3.8 percent at $29.66.

Investors were keeping an eye on the debate in Washington over US government budget cuts that will take effect starting Friday if lawmakers fail to reach agreement on spending and taxes. President Barack Obama and Republican congressional leaders arranged last-ditch talks to prevent the cuts, but expectations were low that any deal would emerge.

Europe

European equity markets rose Thursday as dealers brushed aside lowerthan-expected growth in the United States to focus on upbeat jobs data in the world’s biggest economy, dealers said.

London’s benchmark FTSE 100 index ended the day up 0.55 percent to 6,360.81 points, while Frankfurt’s DAX 30 grew 0.86 percent to 7,741.7 points — aided also by official data which showed that Germany’s jobless total fell to its lowest level in five months in February.

The Paris CAC 40 won 0.85 percent to 3,723.00 points and Milan’s FTSE Mib index climbed 0.60 percent to 15,921 points amid ongoing political deadlock in Italy after inconclusive elections that had sparked a fierce sell-off earlier in the week.

Back in Europe, investors pored over a raft of company results in Thursday trade.

Royal Bank of Scotland shares sank 6.6 percent to 323.9 pence after the group logged its fifth successive annual loss on the back of compensation payouts, Libor rate-rigging fines and a vast accounting charge.

Losses after tax widened to £5.97 billion ($9.05 billion, 6.89 billion euros) in 2012, when the bank was rocked by a series of scandals. That compared with a shortfall of £1.997 billion in 2011.

Meanwhile, International Airlines Group shares soared 7.9 percent to 239.2 pence, despite the company posting an annual net loss of 943 million euros ($1.24 billion) on financial woes at

Spanish wing Iberia and a high fuel bill.

UK

Britain’s top share index rose on Thursday, extending its monthly winning streak to nine months, buoyed by assurances from US and European central banks that they would continue to pursue supportive monetary policy.

The blue-chip FTSE 100 index closed 34.93 points higher, up 0.6 percent at 6,360.81, finishing up 1.3 percent on the month and extending its longest monthly winning streak since 1997.

“With the recent economic data being ahead of expectations and corporate data surprising to the upside, most of the dip buying we have seen has been led by long term investors,” said Atif Latif, director of trading at Guardian Stockbrokers.

“They still understand in the search for yield the equity market offers more upside than the negative real rate of return from the fixed income market.”

Year to date, the FTSE has gained 7.9 percent, with total returns (including dividend payouts) of 8.4 percent. However, foreign investors into British stocks have suffered at the hands of weakening pound, with sterling depreciating 6.7 percent against the dollar this year.

Aiding gains was a 7.9 percent rise in International Airlines Group, which topped the blue-chip leader board, after its 2012 operating loss of 68 million euros ($89.14 million) came in better than consensus.

Rik Thakrar, senior dealer at Spread Co, says his clients remain buyers of IAG, and clearly anticipated further gains.

“Willie Walsh stated that the company intends to continue with its large scale restructuring plan, thereby diverting much of its resources to more profitable routes,” he said.

Banking stocks notched up solid gains on the central banks’ reaffirmation of a dovish stance. Royal Bank of Scotland was the notable exception after disappointing results from the part-nationalised lender.

Asia

Asian markets rose Thursday after the Dow on Wall Street hit a more than fiveyear high, while the head of the European Central Bank soothed concerns over the eurozone.

Tokyo climbed 2.71 percent, or 305.39 points, to 11,559.36 as the yen sank on confirmation that Japan’s government had put forward Haruhiko Kuroda to take over at the Bank of Japan.

The dollar bought 92.36 yen, compared with 92.16 yen in New York late Wednesday.

Sydney added 1.34 percent, or 67.5 points, to end at 5,104.1 and Seoul rose 1.12 percent, or 22.45 points, to 2,026.49.

Hong Kong shares advanced 1.96 percent, or 443.26 points, to 23,020.27 and Shanghai jumped 2.26 percent, or 52.37 points, to 2,365.59. In other markets: Wellington jumped 1.02 percent, or 43.69 points, to 4,320.01.

Air New Zealand added 4.1 percent to NZ$1.40 and Auckland Airport was up 2.2 percent at NZ$2.83 while Telecom rose 2.1 percent to NZ$2.42.

Manila closed 1.59 percent higher, adding 105.18 points to 6,721.45.

SM Investments rose 3.37 percent to 1,044 pesos while Bloomberry Resorts gained 2.64 percent to 14.78 pesos.

Singapore rose 0.27 percent, or 8.83 points, to close at 3,269.95.

United Overseas Bank fell 0.63 percent to Sg$19.08 while Jardine Cycle and Carriage gained 0.86 percent to Sg$51.60.

Bangkok added 1.55 percent, or 23.53 points, to 1,541.58.

Telecoms company True Corporation jumped 3.88 percent to 6.70 baht, while supermarket operator Siam Makro rose 6.61 percent to 484.00 baht.

Mumbai slid 1.52 percent, or 290.87 points, to 18,861.54 points.

Top commercial bank State Bank of India fell 5.8 percent to 2,085.4 while mobile phone firm Reliance Communications fell 11.8 percent to 61.1 rupees.

Jakarta ended up 1.68 percent, or 79.37 points, at 4,795.79.

Telekomunikasi Indonesia rose 5.91 percent to 10,750 rupiah, miner Aneka Tambang climbed 0.78 percent to 1,290 rupiah, and paper maker Pabrik Kertas Tjiwi Kimia dropped 1.12 percent to 2,200 rupiah.

Kuala Lumpur gained 0.83 percent, or 13.49 points, to close at 1,624.14.

British American Tobacco soared 4.7 percent to 61.00 ringgit while UMW Holdings rose 4.1 percent to end at 12.80 ringgit. Bumi Armada slipped 0.3 percent to 3.79 ringgit.

Taipei was closed for a public holiday.

Oil

The price of oil was little changed Thursday after the government slightly revised upward its estimate of fourthquarter US economic growth.

Benchmark crude for April delivery fell 10 cents to $92.66 a barrel in afternoon trading on the New York Mercantile Exchange.

Brent crude, used to price many kinds of oil imported by US refineries, rose 38 cents to $112.25 on the ICE Futures exchange In London.

In other energy futures trading on the Nymex:

Wholesale gasoline rose 3 cents at $3.14 a gallon.

Heating oil was unchanged at $2.99 a gallon.

Natural gas rose 5 cents to $3.48 per 1,000 cubic feet.

Gold

Gold headed towards its longest run of monthly declines in more than 16 years on Thursday, as the dollar edged up versus the euro and signs of moderate economic recovery continued to blunt its appeal to investors.

Spot gold fell 0.6 percent to $1,587.66 per ounce by 1536 GMT, on course for a monthly decline of around 4 percent. The embattled precious metal has been in the red for five straight months, the longest such losing streak since late 1996 to early 1997.

US gold futures for April delivery fell 0.5 percent to $1,587.50.