Stocks advance on China recovery as bonds decline

New iPhones

The gain in S&P 500 futures indicated the U.S. gauge will advance for a sixth day. Apple Inc. rose 0.5% in pre- market New York trading before unveiling new iPhone models at an event in Cupertino, California.

The MSCI Emerging Markets Index added 1.5%, rising for a fifth day to a three-month high. The Shanghai Composite Index gained 1.2% and the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong increased 1.6%. The S&P BSE Sensex increased 3.8% and the rupee jumped 2.2% as trading resumed following a holiday. The Jakarta Composite Index added 4%.

Dubai’s DFM General Index climbed 8.5%, the most among 94 equity indexes tracked by Bloomberg worldwide. Benchmark gauges in Abu Dhabi and Qatar jumped more than 4.5%. Israel’s TA-25 Index advanced 1.6%.

Russia sold its first sovereign bonds in euros, along with dollar debt, raising 725 million euros ($962 million) from seven-year securities and $6 billion in bonds due in 2019, 2023 and 2043. South Africa sold $2 billion of 12-year bonds in overseas debt markets after boosting the size of the offering.

Yen Weakens

The yen slid 0.7% to 100.30 per dollar and 0.3% versus the euro, while the U.S. currency was little changed at $1.3242 per euro. Norway’s krone jumped 1.3% to 7.8616 per euro after inflation accelerated faster than analysts estimated.

Treasury three-year note yields were at 0.87%, almost double the 0.44% average over the past year, as the U.S. prepared to auction $31 billion of the debt. Ten-year gilt yields climbed as much as seven basis points to 3.03%, the highest since July 2011. German government bonds underperformed all their euro-area peers.

Spain’s bonds rallied, pushing 10-year yields below Italy’s for the first time in 18 months. The Italian bonds failed to match the gains in Spanish securities on concern a vote on whether to expel Silvio Berlusconi from Italy’s Senate will destabilize the coalition government.

The yield spread on global investment-grade notes widened for a third day to 123 basis points, the most since Aug. 16, Bloomberg index data show.

Verizon is marketing what may be the biggest bond sale on record to finance the purchase of a stake in its mobile phone unit from Vodafone Group Plc. The offering in as many as eight parts may exceed Apple’s $17 billion issue in April.

Verizon Offering

Verizon may sell three-, five-, seven, 10-, 20-, and 30- year debt as soon as Sept. 11, according to a person with knowledge of the offering. The New-York based company may also sell securities in euros, pounds, and possibly yen, Societe Generale analysts wrote in a report dated Sept. 8.

The cost of insuring against losses on corporate bonds fell to the lowest in almost a month. The Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies decreased 2.5 basis points to 98 basis points, the least since Aug. 14.

WTI dropped for a second day to $107.45 a barrel and gold declined 1.6% to $1,364.83 an ounce. The S&P GSCI gauge of 24 commodities slipped 1.2%, the second consecutive decline as silver retreated 1.9%.

Russia’s Interfax news agency cited Syrian Foreign Minister Walid al-Muallem as saying his government accepted the proposal. Muallem was in Moscow yesterday when Russia first announced its initiative, and said at the time he “welcomed” it.

www.bloomberg.com

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