Europe Stocks Rise as Crimea Vote Boosts Russia’s Micex 

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European stocks rebounded from a five-week low while the yen and Swiss franc weakened and Treasuries declined after Crimea’s vote to leave Ukraine. Russian shares rallied after four days of declines while Ukraine’s hryvnia retreated.

The Stoxx Europe 600 Index climbed 0.7 percent at 10:30 a.m. in London. Futures on the Standard & Poor’s 500 Index added 0.6 percent. Japan’s currency slid against 15 of its 16 major peers and the franc fell a second day. The yield on 10-year Treasuries rose two basis points to 2.67 percent. U.K. natural gas dropped 1.6 percent. Moscow’s Micex Index climbed 2.1 percent and the hryvnia headed for its lowest level this month. China’s yuan retreated to an 11-month low versus the dollar.

Global stocks lost $1.4 trillion in value last week on investor concern over Russia’s actions in Ukraine’s Crimea and China’s slowing economy. About 97 percent of voters in Crimea chose to leave Ukraine, which transits about half of Russian gas supplies to Europe, and become part of its eastern neighbor in a referendum deemed illegal by the U.S. and the European Union. China’s central bank doubled the yuan’s trading band as the government seeks to allow greater exchange rate fluctuations.

European Shares

Almost five stocks climbed for each that fell on the Stoxx 600, which dropped 3.3 percent last week, the most since January. One of 19 industries on the measure retreated.

RWE AG increased as much as 3 percent after L1 Energy agreed to buy the utility’s Dea oil and gas unit for 5.1 billion euros ($7.1 billion). Societe Generale SA (GLE) gained as much as 1.7 percent after France’s second-largest bank by market value agreed to sell its Asian private bank to DBS Group Holdings Ltd. DBS, Southeast Asia’s biggest lender, rose 1.1 percent.

Vodafone Group Plc climbed 1 percent after the world’s second-largest wireless carrier agreed to buy Spanish cable operator Grupo Corporativo Ono SA for 7.2 billion euros.

Persimmon Plc, the U.K.’s largest housebuilder, jumped 4.9 percent, and Taylor Wimpey Plc climbed 4.2 percent. Rightmove Plc said asking prices for homes in London surged to a record this month. A Treasury statement showed the U.K. will invest a further 6 billion pounds ($10 billion) in its Help-to-Buy program, which allows people to purchase a newly built home worth as much as 600,000 pounds with a 5 percent deposit.

Linde, Tencent

Ackermans & van Haaren NV advanced 4.6 percent after ING Groep NV recommended buying shares of the investment firm and increased its price estimate.

Linde AG lost 3.1 percent after the world’s largest industrial-gas producer reported quarterly profit that missed analysts’ estimates. GAM Holding AG (GAM) fell 2.5 percent after RBC Capital Markets lowered the Swiss money manager to the equivalent of a sell.

S&P 500 futures expiring in June gained after the index lost 2 percent last week, the most since January. It closed at its lowest level since Feb. 21 on March 14.

Tencent Holdings Ltd. (700), China’s biggest internet company, tumbled 3.1 percent in Hong Kong as e-commerce site Alibaba Group Holding Ltd. began work on a U.S. listing.

The MSCI All-Country World Index rose 0.1 percent after its biggest weekly loss since June. The MSCI Asia Pacific Index dropped 0.3 percent, extending its biggest weekly slump since May 2012.

Emerging Markets

The MSCI Emerging Markets Index advanced 0.3 percent, the most in more than a week on a closing basis. The ruble appreciated 0.2 percent versus the dollar, while Ukraine’s hryvnia tumbled 1.2 percent, poised for the lowest level since Feb. 28.

China’s plan to improve urban housing fueled gains in builders, with property developer China Vanke Co. jumping 3.1 percent. The Hang Seng China Enterprises Index rose 0.4 percent, snapping a five-day drop. The Shanghai Composite Index advanced 1 percent after falling 2.6 percent last week.

Stock markets in the Czech Republic, Hungary, Turkey and Poland each added more than 1 percent.

Shares in Abu Dhabi and Dubai, which will be added to the emerging-market index this year, rallied more than 1 percent as Dubai refinanced $20 billion at a quarter of the original cost, freeing cash to service liabilities and fund expansion plans. Emaar Properties PJSC (EMAAR), developer of the world’s tallest skyscraper, surged 1.5 percent to the highest level since 2008, as apartment and villa sales climbed amid an economic recovery.

EU Meeting

European Union foreign ministers met in Brussels today to impose sanctions on Russia amid the worst diplomatic standoff since the Cold War. Russia has deployed about 60,000 troops along the Ukrainian border, the government in Kiev said.

The international community “will not recognize the results of a poll administered under threats of violence and intimidation from a Russian military intervention,” the White House said in a statement. “Russia’s actions are dangerous and destabilizing. Military intervention and violation of international law will bring increasing costs for Russia.”

U.K. natural gas dropped for the first time in four days. Brent fell to $107.57 a barrel. The S&P GSCI (SPGSCI) gauge of 24 commodities declined 0.3 percent as corn retreated 1.2 percent and aluminum slipped 0.7 percent. U.S. natural gas jumped 1.8 percent as cold weather boosted demand for heating fuel.

Corporate Bonds

The cost of insuring corporate bonds against losses fell for a second day. The Markit iTraxx Europe index of credit-default swaps on 125 investment-grade companies decreased 1.5 basis points to 74.75 basis points, the lowest since March 12.

Manufacturing (EMPRGBCI) in the New York area expanded in March, a report at 8:30 a.m. local time may show. The Federal Reserve Bank of New York’s general economic index will rise to 7.00 from 4.48 in February, according to the median forecast of economists surveyed by Bloomberg.

A release at 9:15 a.m. Washington time may show industrial production gained 0.2 percent in February after falling 0.3 percent in January, according to the median economist estimate.

The yen declined 0.4 percent to 101.78 per dollar after appreciating 1.9 percent last week. Japan’s currency dropped 0.4 percent to 141.53 per euro. The 17-nation shared currency was little changed at $1.3908. Switzerland’s franc slipped 0.1 percent to 1.21535 per euro and declined 0.2 percent to 87.39 centimes per dollar.

Treasury 10-year note yields climbed after dropping 13 basis points last week, the most since the period ended Jan. 10, Bloomberg Bond Trader data showed.

Mergers, Alibaba

Softbank Corp., the Japanese mobile operator controlled by billionaire Masayoshi Son, was the biggest support to the MSCI Asia Pacific Index today, while Tencent was the biggest drag. Shares in the Japanese company, which owns about 37 percent of Alibaba, surged as much as 6.6 percent on news the Chinese firm is moving toward what may be the biggest initial public offering since Facebook Inc. in 2012.

Hong Kong’s Hang Seng Index dropped 0.3 percent with Tencent leading declines. The Hang Seng China Enterprises Index climbed after capping its biggest weekly drop since October.

Alibaba, China’s biggest e-commerce company, has started the process of undertaking a U.S. initial public offering after struggling to get Hong Kong to approve its proposed governance structure, according to a person familiar with the matter.

Options traders have turned more bearish on the yuan as the currency is allowed, from today, to trade as much as 2 percent on either side of a daily reference rate set by the People’s Bank of China. The onshore spot rate fell as much as 0.51 percent in Shanghai, equaling the biggest slump since 2008.

One-year options granting the right to sell the yuan cost 1.84 percentage points more than contracts allowing purchases, the most since September.

(By Glenys Sim and Rob Verdonck)

Source: bloomberg

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