Gold, Emerging-Market Stocks, U.S. Index Futures Rise as Dollar Drops

Frnakfurt (Mar 21)  Gold advanced $6.67 to $1,341.43 an ounce, its first gain this week. Emerging-market equities rose, led by the biggest gain in five weeks for Hong Kong-listed Chinese shares, U.S. index futures advanced and the dollar weakened. Russian stocks fell as the European Union followed the U.S. in intensifying sanctions against Russia.

The MSCI Emerging Markets Index gained 0.4 percent at 7:48 a.m. in New York as Hong Kong’s Hang Seng China Enterprises Index climbed 2.4 percent after entering a bear market yesterday. Standard & Poor’s 500 Index futures added 0.3 percent and the Stoxx Europe 600 Index rose 0.3 percent. Russia’s Micex Index lost 1.6 percent. The Australian dollar rose against all of its major peers on speculation the country’s growth will defy the slowdown in China. Gold rose 1 percent.

Developing-market equities rebounded from their lowest valuation in almost a decade. The EU extended the list of prominent Russians subject to sanctions for their part in the annexation of Crimea, while Fitch Ratings Ltd. revised its outlook for the country’s debt to negative. The dollar has strengthened this week as Federal Reserve Chair Janet Yellen indicated that interest rates will rise six months after the central bank’s monthly bond purchases come to an end.

“There’s greater market volatility now as investors try to interpret the Fed policy intent,” said Pang Cheng Duan, head of fixed income in Singapore at Manulife Asset Management, which manages about $263 billion globally. “The sanctions on Russia is a low-risk event for now, but we can’t rule out the chances it could escalate.”

Emerging Markets

Developing-market equities headed for a weekly gain of 0.7 percent, paring their losses this year to 5.8 percent. The benchmark trades at a price-to-book ratio of 1.4, its cheapest level versus the MSCI World Index since 2004.

Chinese shares rallied amid speculation the government is loosening funding restrictions for property developers and banks to support growth. The Shanghai Composite Index climbed 2.7 percent, its biggest gain in four months.

The WIG 30 Index in Poland increased 0.6 percent. Natural- gas producer OAO Novatek led losses on Russia’s Micex.

The S&P 500 has climbed 1.7 percent so far this week, leaving the equity benchmark 0.3 percent from a record. Symantec Corp. slumped 10 percent in early New York trading after the maker of anti-virus software fired its chief executive officer. Steve Bennett had run Symantec as CEO and president for less than two years.

Nike Inc. slid 2.9 percent after the world’s largest sporting-goods manufacturer forecast that sales will climb at a slower pace than analysts had predicted. Chief Financial Officer Donald Blair said that revenue will rise at a high single-digit rate in the quarter through May. Analysts had projected growth of 12 percent.

European Equities

Commodity producers led gains on the Stoxx 600 after the Wall Street Journal reported that workers at Anglo American Plc’s South African platinum business have agreed to stop their strike and return to work. The mining company rose 2.1 percent.

The Aussie dollar has risen 1.5 percent this week, making it the best performer of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. It strengthened 0.5 percent to 90.82 U.S. cents today.

The Bloomberg Dollar Spot Index, which monitors the U.S. currency against its 10 major counterparts, retreated 0.1 percent. It has climbed 0.7 percent since March 14, its biggest weekly advance since Jan. 17.

Source: WashPost