Global stocks, industrial metals gain as China inflation slows

‘Lowered Expectations’

“Over the last four quarters, analysts have cut their forecasts too aggressively going into reporting season, resulting in consistent beats on lowered expectations,” Savita Subramanian, Bank of America Corp.’s head of U.S. equity strategy, wrote in a note to clients dated April 8. “However, recent data suggest that the magnitude and the proportion of positive surprises may be lower this quarter” compared with the fourth quarter, she wrote. “These headwinds include the deterioration in management guidance, weaker economic data in March, and the rising dollar.”

The Stoxx Europe 600 Index added 0.1%. Mining companies led gains, with Rio Tinto Group, Lonmin Plc and Kazakhmys Plc rising more than 3.5%. The Stoxx 600 Basic- Resources Index rallied 2.7%, the most in a month.

Emerging Markets

The MSCI Emerging Markets Index rose the first time in seven days, adding 0.6%. The Hang Seng China Enterprises Index of mainland companies increased 1.7%, the most since March 20. The consumer price index rose 2.1% in March from a year earlier, compared with the 2.5% median of 38 estimates in a Bloomberg survey. Russia’s Micex Index climbed 1.1% and Brazil’s Bovespa climbed 0.9%.

Thailand’s baht gained, breaching 29 per dollar for the first time since 1997, as demand for the nation’s bonds rose on Japan easing. The gains were “too fast” and the Bank of Thailand is ready to intervene if the currency’s moves are not consistent with fundamentals, Governor Prasarn Trairatvorakul said today.

France’s 10-year bond yield climbed four basis points to 1.80% after falling to a record-low 1.709% yesterday. Austrian, Belgian, and Dutch bonds also slid and the yield on benchmark German bunds rose two basis points to 1.26%.

Copper rose 2.1% to $7,603 a metric ton and zinc gained 1.4%. China is the biggest buyer of the industrial metals. In Chile, the world’s largest copper producer, miners are holding their first nationwide strike for 24 hours to push for greater job security. West Texas Intermediate oil was little changed at $93.35 a barrel.

Bloomberg News

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