Stocks, commodities rise on U.S. budget optimism; dollar weakens

Crude Rallies

Crude for January delivery rallied 3.3 percent to $89.51 a barrel after Israel said it may expand an assault on the Gaza Strip. Israeli Prime Minister Benjamin Netanyahu said yesterday that the army is prepared to “significantly widen the operation,” raising concern Middle East unrest will disrupt oil supplies.

The Stoxx Europe 600 Index rallied 2.2 percent, rebounding from the biggest weekly drop in five months as all 19 industry groups advanced. BP Plc jumped 3.6 percent after the Sunday Times reported that Europe’s second-biggest oil company is planning a 3.7 billion-pound ($5.9 billion) buyback. HSBC Holdings Plc gained 3.8 percent in London after saying it’s in talks to sell a stake in Ping An Insurance (Group) Co., China’s second-largest insurer.

European Movers

SAS AB jumped 23 percent after the Swedish airline won the backing of unions representing pilots and most of its cabin crew for plans to eliminate jobs and shrink the business. Fugro NV plummeted as much as 23 percent, the biggest drop since 1995, after the Dutch oil-services company cut its forecasts and said Chief Executive Officer Arnold Steenbakker will leave.

European finance chiefs are due to meet in Brussels tomorrow for the second time in a week after they agreed seven days ago to keep Greece’s bailout aid flowing. In addition to a disagreement between the European Union and International Monetary Fund over softening Greece’s debt target, the ministers will attempt to re-engineer the current bailout without asking taxpayers for more money.

Greek 10-year bonds rose for a seventh consecutive day, pushing the yield down 25 basis points to 17.22 percent.

The cost of insuring against default on European corporate debt fell the most in a month, with the Markit iTraxx Crossover index of credit-default swaps linked to 50 mostly junk-rated companies dropping 25 basis points to 537 basis points.

Industrial Metals

Copper for delivery in three months advanced 2.6 percent to $7,804 a metric ton on the London Metal Exchange. All six main industrial metals traded on the bourse gained. Gold for immediate delivery rose 1.2 percent to $1,733.92 an ounce in London, gaining for the first session in three. Silver, platinum and palladium also advanced.

Saudi Arabia’s benchmark stock index slumped amid speculation over the king’s health after he underwent back surgery, which the government said was successful. The Tadawul All Share Index dropped 1.5 percent to 6,666.46, the lowest since Oct. 14.

Emerging-market stocks rose for the first time in eight days, led by exporters. Samsung Electronics Co., which got about 28 percent of its third-quarter revenue from America, and Cosco Pacific Ltd., the container-terminal arm of China’s largest shipping group, gained more than 1.9 percent. The Micex index in Russia, the world’s biggest energy exporter, rallied more than 1 percent and rose above its highest closing level in a week.

European Union carbon permits dropped to the lowest since July as supplies of new allowances were set to increase this week. The December contract dropped as much as 5.1 percent to 6.55 euros a ton on the ICE Futures Exchange in London.

Bloomberg News

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