European stocks rose for a second day and bonds fell before central bank meetings in the region. Indian equities rallied and the rupee strengthened as the new central bank governor outlined plans to bolster banks.
The Stoxx Europe 600 Index added 0.6 percent to 304.27 at 8:37 a.m. in London. Contracts on the Standard & Poor’s 500 Index (SPX) rose 0.1 percent. India’s S&P BSE Sensex climbed 2.2 percent, while the rupee appreciated 1.6 percent. The euro slid 0.3 percent, while the 10-year yield on French bonds increased three basis points to 2.55 percent. Gold and silver fell at least 0.3 percent. The yen weakened past 100 per dollar for the first time since July 25.
Sweden’s Riksbank left its key rate unchanged and the European Central Bank and Bank of England will do the same, according to economist surveys. Reserve Bank of India Governor Raghuram Rajan announced plans to make it easier for banks to open branches and lend to non-state sectors. U.S. jobs data tomorrow may provide clues to changes in Federal Reserve stimulus. A U.S. Senate panel authorized a limited military strike in Syria.
“There’s optimism India’s new central bank will help get its house in order,” said Jonathan Ravelas, the chief market strategist at Manila-based BDO Unibank Inc. “Gains in emerging-market assets indicate some recovery in investor confidence. It’s probably a temporary respite until the start of tapering in U.S. stimulus and the war in Syria worsens.”
Samsung Rallies
The MSCI Emerging Markets Index advanced 0.5 percent to a two-week high. South Korea’s Kospi index climbed 1 percent and the Hang Seng China Enterprises Index rose 1.1 percent, heading for its highest close in three months.
Dixons Retail Plc, the largest U.K. electronics retailer, jumped 7.8 percent after receiving an offer from Mutares AG to buy its Pixmania stores. Samsung Electronics Co. increased 1.9 percent in Seoul after unveiling a wristwatch device that can make phone calls, surf the Web and take photos.
ICICI Bank Ltd. jumped 8.6 percent, pacing gains among Indian lenders. The S&P BSE Bankex index, a gauge of 13 banking stocks, surged 7.9 percent, poised for its biggest rally since May 2009. The rupee strengthened to 66.03 per dollar, paring its 2013 loss to 17 percent.
JPMorgan Chase & Co. analysts said the plans outlined by Governor Rajan will have a “major long-term impact” on bank profits. Lenders can also swap non-resident dollar deposits, the RBI said on its website.
The yen slid to as weak as 100.09 per dollar. The Bank of Japan left its monetary policy unchanged today and upgraded its assessment of the economy. The Bloomberg U.S. Dollar Index added 0.3 percent.
ECB, BOE
Policy makers meeting in Frankfurt today will keep the ECB’s benchmark interest rate unchanged at a record low of 0.5 percent, according to all 56 economists in a Bloomberg News survey. The central bank will announce its interest-rate decision at 1:45 p.m. and President Mario Draghi will hold a press conference 45 minutes later.
The BOE will keep its quantitative-easing program at 375 billion pounds ($585 billion) and hold the benchmark rate at a low of 0.5 percent, according to separate surveys of economists. That decision is due at noon in London.
The U.S. economy maintained a “modest to moderate” pace of growth from July to August, the Fed said yesterday in its Beige Book survey. The central bank, which has said that cuts to its bond-buying program will depend on continued improvement in the economy and job market, will probably decide to reduce purchases at its September meeting, according to 65 percent of economists surveyed by Bloomberg News Aug. 9-13.
Data today may show claims for jobless benefits fell to 330,000 last week from 331,000 in the previous period, according to a Bloomberg survey. Nonfarm payrolls data on Sept. 6 will probably show an increase of 180,000 in August, compared with an gain of 162,000 for July, another survey showed.
Fed Tapering
“U.S. payrolls is the key event, we’re looking at something around 190,000 and if we get that sort of number it reinforces the idea of Fed tapering occurring at the upcoming meeting,” Chris Green, a strategist at First NZ Capital Ltd., a brokerage and wealth-management firm, said from Auckland.
West Texas Intermediate crude oil rose 0.5 percent to $107.81 a barrel, after falling 1.2 percent yesterday.
The Senate Foreign Relations Committee voted to authorize President Barack Obama to conduct a limited U.S. military operation in Syria, the first step toward congressional endorsement of the effort.
The resolution, approved 10-7, supports use of force in a “limited and specified manner against legitimate military targets” during a 60-day period following enactment, with a possible 30-day extension at Obama’s request. The resolution doesn’t authorize use of U.S. ground troops in combat.
Gold declined to $1,387.73 an ounce and silver retreated to $23.357 an ounce.
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