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quarta-feira, março 18, 2009

Stocks in Europe, Asia Gain, Led by Banks; U.S. Futures Decline

By Adria Cimino

March 18 (Bloomberg) -- Stocks in Europe and Asia rose, sending the MSCI World Index to its longest stretch of gains since 2007, as investors speculated central banks will increase efforts to buoy the economy. U.S. futures declined.

UBS AG, Switzerland’s largest bank, climbed for a seventh day as Federal Reserve officials debated how to boost growth. UniCredit SpA gained 13 percent as Italy’s biggest bank reported profit that beat analysts’ estimates and said it may seek government aid. Mizuho Financial Group Inc., the Asian firm hardest hit by the credit crisis, advanced 3 percent as the Bank of Japan pledged to increase debt purchases to spur lending.

The MSCI World increased for a seventh day, adding 0.4 percent at 11:24 a.m. in London. The gauge of 23 developed nations has posted its longest streak of gains since June 2007 as Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. said they made money during the first two months of 2009, spurring optimism the worst of the financial crisis is over.

“We’re expecting comments from the Fed” on the purchasing of assets, said Benoit de Broissia, an equity analyst at KBL Richelieu Gestion in Paris, which oversees $2 billion. “UniCredit was a bit better than expected and that reassured the market. Our position is news flow remains difficult and the environment remains difficult.”

European stocks pared gains and U.S. futures extended their decline after data showed that U.K. unemployment rose at the fastest pace since at least 1971 in February.

Obama’s Inauguration

Futures on the Standard & Poor’s 500 Index slipped 0.3 percent. The S&P 500 since March 9 has erased more than half the loss since President Barack Obama took office. Gains in the U.S. yesterday came amid speculation that Fed policy makers will consider increasing the pace and size of a $600 billion program to purchase mortgage securities and other assets.

Treasuries were little changed, following three days of losses, as Fed policy makers debate whether to buy government debt as a way to pull the economy out of recession. The yen weakened against the euro on the Bank of Japan’s move to step up debt purchases.

More than three stocks rose for every two that fell in Europe’s Dow Jones Stoxx 600 Index, which added 0.4 percent. Gains were limited as Volkswagen AG retreated.

The MSCI Asia Pacific Index rose 0.8 percent as HSBC Holdings Plc said it remains “well capitalized” and profitable.

UBS, UniCredit

UBS, the European bank with the biggest credit-related losses, added 1.4 percent to 11.87 Swiss francs, extending its seven-day gain to 38 percent.

The Fed will keep the benchmark interest rate as low as zero percent, according to all 71 forecasters in a Bloomberg News survey. At least three of the 17 top Fed officials want to buy Treasuries or target the supply of money, while Chairman Ben S. Bernanke has favored reviving specific credit markets.

UniCredit surged 13 percent to 1.10 euros. The bank posted net income of 505 million euros ($658 million) in the fourth quarter. Analysts had predicted 351 million euros. The company said it may seek as much as 4 billion euros in government aid.

Baloise Holding AG, Switzerland’s third-biggest insurer, advanced 5.8 percent to 68 francs. The company will cut 230 jobs in Germany after full-year profit declined 54 percent to 358.3 million francs ($304 million). Chief Executive Officer Martin Strobel said the job cuts and new products should add around 200 million francs to annual profits by 2012.

Mizuho, which has declared $7.6 billion of credit-related losses, added 3 percent to 206 yen. The Bank of Japan will buy 1.8 trillion yen ($18.3 billion) of government debt from banks each month, up from 1.4 trillion now. The central bank said yesterday it may provide as much as 1 trillion yen in subordinated loans to banks to replenish capital and keep them lending.

Volkswagen, Sun Microsystems

Volkswagen, Europe’s largest automaker, slipped 1.9 percent to 212.14 euros. The company expects 2009 profit to fall by up to 90 percent, Capital magazine reported, citing internal planning documents. Volkswagen spokesman Michael Brendel said the company had no comment on the report.

Sun Microsystems Inc. rallied 62 percent to $8.03 in Germany after the Wall Street Journal reported International Business Machines Corp. is in talks to buy the company, citing people familiar with the matter. IBM may pay at least $6.5 billion, the newspaper said, adding that an agreement may not be reached. IBM fell 2.9 percent to $90.26.

Arlene Wainstein, a spokeswoman for IBM in Paris, said it’s company policy not to comment on reports. Shabita Wu, a spokeswoman at Sun in Taipei, declined to comment on the report.

‘Very Shallow’

The S&P 500 has rebounded 15 percent from a 12-year low on March 9, erasing 58 percent of its slump since Obama’s Jan. 20 inauguration. The benchmark index for U.S. equities is still down 14 percent in 2009 as mounting losses at banks raised concern the government would nationalize some lenders. The S&P 500 lost 38 percent in 2008, its worst year since the Great Depression.

Global stock markets are going through a bear-market rally, according to HSBC Global Asset Management (Hong Kong) Ltd. While economic deterioration will slow, growth will be “very shallow” when recovery starts, which is likely to happen in the second half of this year, said Leon Goldfeld, Hong Kong-based chief investment officer of HSBC Global, which oversees $372 billion.

Ten-year Treasury yields fell below 3 percent today after rising 15 basis points in the previous three sessions. Fed officials said in January they may consider buying longer-term Treasuries to revive lending. On March 6, Fed Bank of New York President William Dudley said policy makers had decided for now not to expand the range of securities they purchase.

Fed officials appear “disinclined” to announce plans to buy Treasuries, according to Goldman Sachs Group Inc. The outcome of the meeting will likely be identical to the Jan. 27-28 gathering, Edward McKelvey, senior U.S. economist in New York at Goldman Sachs, wrote in a note to clients this week.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

Last Updated: March 18, 2009 07:28 EDT

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