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Hong Kong - Stocks rose in Europe, buoyed by a rebound in commodities, while bonds fell amid signs the region’s economy was expanding. US equity-index futures recovered from a drop in Asian trading fueled by the lowest reading on a gauge of Chinese manufacturing since 2009.
Oil led commodities higher amid forecasts for a drop in US crude stockpiles and energy producers gained the most among European equities.
While a gauge of euro-area manufacturing and services slipped in September, the third-quarter average stood at the highest level in more than four years, according to a report published on Wednesday. Carmakers gained after their biggest three-day slump since 2011.
“European data have been reasonable,” said James Buckley, who helps oversee about $43bn at Baring Asset Management in London. “Investors have been favoring more domestic European stocks, and I expect this trend to continue. We have sold off quite heavily, and we could have a day or two more of gains.”
Stocks in Europe eked out gains after their worst day in almost a month on Tuesday, when an index of mining companies dropped to its lowest since 2009 and carmakers sank the most since 2011.
Equities worldwide are set for the worst quarter in four years as China’s growth slows, denting prices for metals and crude oil. That’s also dimmed the outlook for inflation and boosted the allure of government debt.
Chinese shares in Hong Kong slid the most in three weeks as emerging-market currencies fell, with Indonesia’s rupiah declining to its weakest level in 17 years.
Stocks
The Stoxx Europe 600 Index added 0.8% at 11:50 in London as three shares advanced for every one that declined.
Volkswagen AG gained 2.4% after closing at its lowest price since 2011 on Tuesday. More than 30% was erased from the company’s market value in two days as a scandal over emissions-test cheating escalated.
Standard & Poor’s 500 Index E-mini futures expiring in December advanced 0.3%, following a 1.2% drop in the gauge yesterday. Data later today may show a decline in a US Purchasing Managers’ Index for manufacturing, economists forecast.
With the Federal Reserve no longer providing buffer on bad days, appetite for protection against U.S. stock losses has increased by the most since 2009, according to options data.
Commodities
The Bloomberg Commodity Index climbed 0.5% after trading near its lowest close since August 26, when it tumbled to levels last seen in August 1999.
“Most of the negative news has already been priced in,” said Eugen Weinberg, head of commodities Research at Commerzbank AG in Frankfurt. “There has been a technical rebound after recent selloffs.”
West Texas Intermediate crude for November delivery climbed 0.7% to $46.69 a barrel. Oil was buoyed by deeper cuts to production targets for 2017 by Total SA, Europe’s second-biggest oil company.
US stockpiles probably shrank by 1.25 million barrels through September 18 for a second weekly decline, according to a Bloomberg survey of analysts before government data Wednesday.
Industrial metals rose in London. Copper gained 0.5% after slumping 3.6% in the previous session. Nickel advanced, while zinc climbed 2.2% after touching the lowest price in more than five years on Tuesday.
Emerging markets
The MSCI Emerging Markets Index sank 1.6% as the Hang Seng China Enterprises Index declined 2.7%, the most since September 1. The Shanghai Composite fell 2.2%, halting a three-day gain.
China’s preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics slid to 47 in September, the lowest level since the depths of the global financial crisis. Readings of output, new orders and employment all declined at a faster rate, according to the survey, known as the flash PMI.
Concern the slowdown will hurt countries that rely on the world’s second-largest economy for exports sent equity gauges down at least 1.4% from South Korea and the Philippines to Indonesia and Malaysia.
Currencies slid, with Malaysia’s ringgit and the South Korean won dropping at least 0.9%. A gauge tracking 20 developing nations fell for a fourth day to a two-week low.
The rupiah weakened 0.7% after the Indonesian parliament’s finance commission agreed to lower the economic growth projection in the 2016 budget to 5.3% from 5.5%.
Citic Securities tumbled 5.7% toward the lowest close in two years after people familiar with the matter said a Chinese government probe found evidence of insider trading.
The company used advance knowledge of government-orchestrated stock purchases to execute trades that benefited the firm, said the people, who asked not to be identified because the matter is private.
