Stocks Climb With Dollar on G-20 as Ukraine Bonds Rally

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Protesters inspect damage caused by recent anti-government protests on Independence Square following recent clashes in Kiev. Ukraine government bonds surged amid conflicting reports about a deal to halt deadly violence.
Protesters inspect damage caused by recent anti-government protests on Independence Square following recent clashes in Kiev. Ukraine government bonds surged amid conflicting reports about a deal to halt deadly violence.

Stocks rose, with the global benchmark index approaching a six-year high, while Spain led an advance in European bonds. Ukraine government securities gained amid talks on a deal to halt violence.

The MSCI All-Country World Index added 0.3 percent at 10:10 a.m. in London and is 0.5 percent from a six-year high reached on Dec. 31. Standard & Poor’s 500 Index futures rose 0.2 percent. Spain’s 10-year bond yield fell three basis points to 3.57 percent. Canada’s dollar slid and the Swedish krona weakened. China’s yuan headed for its biggest weekly loss since 2011 in Hong Kong. Ukraine’s April 2023 dollar bond gained for a second day. U.S. natural gas jumped 3.2 percent.

More than $1.8 trillion has been added to the value of equities worldwide this month amid speculation the global economy is strong enough to withstand stimulus cuts. Group of 20 finance chiefs meeting in Sydney this weekend will back the withdrawal of stimulus in advanced economies and commit to developing new measures to boost growth, according to a draft communique seen by Bloomberg. Ukraine’s president agreed to a plan to resolve the political crisis as S&P warned the country risks default without “significantly favorable changes.”

“The fact that equity markets are back to near recent highs only proves that there is sufficient interest and capital going forward to support them,” said William Hobbs, the London-based head of equity strategy at Barclays Plc’s wealth-management unit. “Investors are taking reassurance from that. It’s not worth betting against a global economic recovery.” 

Valeo Climbs

The Stoxx Europe 600 Index advanced 0.3 percent, up 5.7 percent from its low on Feb. 4. The benchmark gauge is heading for a 0.7 percent gain this week, the third consecutive weekly increase.

The number of shares changing hands in Stoxx 600-listed companies was 8.7 percent lower than the 30-day average, according to data compiled by Bloomberg based on volumes at this time of the day.

Valeo SA (FR) jumped 9.8 percent after the French auto-parts maker posted six-month earnings that beat analyst estimates. Remy Cointreau SA rose 5.7 percent after Barclays Plc upgraded the stock. Vodafone Group Plc climbed 2.7 percent as the wireless carrier is completing its biggest sale of the past decade today, leaving it about half the size it was.

Axa SA (CS) slipped 2.4 percent after Europe’s second-largest insurer reported full-year profit that missed analyst predictions. Elekta AB slumped 11 percent after the maker of radiation-surgery equipment cut its sales and profit forecasts.

Home Sales

S&P 500, which is 0.5 percent away from its all-time high reached last month, gained 0.1 percent this week.

U.S. data today may show purchases of previously owned homes fell 4.1 percent in January to a 4.67 million annual pace, according to the median projection in a Bloomberg survey of economists. The National Association of Realtors will publish the figures at 10 a.m. in Washington. In the U.K., a report may show that retail sales fell 1 percent in January from the previous month.

Ameren Corp., Pinnacle West Capital Corp. and Graham Holdings Co. are among S&P 500 companies reporting earnings today. About 75 percent of those that have posted results this season beat analysts’ profit estimates, data compiled by Bloomberg show.

Groupon Inc. (GRPN) lost 11 percent in German trading after forecasting first-quarter profit that trailed analysts’ estimates on higher expenses for acquisitions and marketing.

Ukraine Talks

The MSCI Emerging Markets Index added 0.7 percent, trimming this week’s decline to less than 0.1 percent. Samsung Electronics Co. (005930), which will unveil a high-end Galaxy phone next week, drove a gauge of technology stocks to a record high, rallying 3.4 percent.

The yield on Ukraine’s 2023 bond fell 50 basis points to 10.60 percent, while the benchmark equity gauge slid 0.6 percent. President Viktor Yanukovych agreed to a plan for resolving the political crisis and the accord will be signed at noon local time, the administration said in a statement. French Foreign Minister Laurent Fabius said on Europe 1 radio that it’s premature to say an agreement has been reached.

The country is at risk of default after a political crisis “deteriorated substantially,” S&P said, downgrading Ukraine’s debt to CCC, eight levels before investment grade, and keeping a negative outlook.

The yield on 10-year Italian debt also declined three basis points, to 3.62 percent as Prime-Minister-designate Matteo Renzi prepared to name his cabinet amid speculation he will accelerate economic reforms to boost the economy. Germany’s 10-year bund yield dropped two basis points to 1.67 percent.

Canada’s Sales

Canada’s dollar fell against all its 16 major peers before a report that economists said will show retail sales dropped 0.4 percent in December, after climbing 0.6 percent the previous month. Consumer prices rose at an annual rate of 1.3 percent last month, from 1.2 percent in December, Statistics Canada will also say, according to a separate survey.

The loonie weakened 0.6 percent to C$1.1162 per dollar after dropping 1.4 percent in the previous two days.

The krona fell as much as 0.5 percent against the euro to 9.0106, the lowest level since Dec. 26 after a report showed consumer confidence unexpectedly declined this month. It slid as much as 0.6 percent versus the dollar to 6.5746.

The dollar rose 0.1 percent to 102.40 yen, extending this week’s gain to 0.6 percent, the biggest since the period through Dec. 27. The U.S. currency was little changed at $1.3712 per euro. The euro was at 140.42 yen.

U.S. natural gas extended this week’s gain to 20 percent, the biggest weekly advance since November 2008. Above-normal temperatures across most of the lower 48 U.S. states this week will give way to a “powerful polar punch” in the Midwest on Feb. 25 through March 1, according to Commodity Weather Group LLC in Bethesda, Maryland. The cold will hit the South and East Coast next week through March 8.