Metals Gain as China Money

Bloomberg News

European shares rose for a fifth day, copper advanced and the dollar strengthened before a U.S. durable goods report. Turkish shares gained and the lira appreciated after BlackRock Inc. said it was buying.

The Stoxx Europe 600 Index rose 0.2 percent at 9:57 a.m. in London today, the longest winning streak in two months. Standard & Poor's 500 Index futures (SPX) were little changed after the gauge closed at a record. The U.S. currency strengthened against 12 of its 16 major peers. The yield on two-year U.K. gilts climbed to a six-month high and copper added 0.3 percent. Corporate bond risk was little changed near a four-year low and the Thai baht weakened to a three-year low.

U.S. durable-goods orders probably expanded in November after declining the month before, economists said before the report's publication later today. The People's Bank of China conducted the first reverse repurchase agreements in three weeks after financing costs surged. Trading in Stoxx 600 companies was 75 percent below the average of the last 30 days and transactions in Europe and the U.S. end early.

'The bull market in the USA and Western Europe has some way to continue,' Yannick Naud, a fund manager at Glendevon King Ltd. in London, said on Bloomberg Television's 'On The Move With Francine Lacqua.' 'The economy itself looks pretty strong.'

The Stoxx 600 jumped 3.9 percent in the past four days for the biggest rally since April. The index advanced 16 percent this year through yesterday.

Media Leading

A gauge of Stoxx 600 media companies climbed the most among 19 industry groups, gaining 0.7 percent. Publicis Groupe SA advanced 1.7 percent and British Sky Broadcasting Group Plc increased 1.2 percent. Royal Boskalis Westminster NV, a Dutch dredging company, rose 2 percent after winning a $275 million contract in Australia.

Futures on the S&P 500 expiring in March gained less than 0.1 percent after the index closed at an all-time high of 1,827.99 yesterday. The gauge rallied 28 percent this year, heading for its biggest annual jump since 1997.

The London Stock Exchange will end trading at 12:30 p.m. local time today, while NYSE Euronext European cash markets will close 35 minutes later. The Madrid bourse closes at 2 p.m. local time. No trading will take place in Germany, Switzerland, Italy or the Nordic countries. In the U.S., trading on the New York Stock Exchange will end at 1 p.m. local time.

A report at 8:30 a.m. in Washignton will show that orders for durable goods in the U.S. rose 2 percent in November, according to a Bloomberg poll of economists. Separate data at 10 a.m. will show that new-home sales fell to a 440,000 annualized pace last month from 444,000 in October, according to the median projection.

Dollar Strengthens

The dollar strengthened 0.1 percent to 104.25 yen after reaching 104.64 yen on Dec. 20, the highest level since October 2008. The U.S. currency added 0.2 percent to $1.3675 per euro. It rose 0.1 percent to 89.23 U.S. cents per Australian dollar.

The yen tumbled 15 percent this year, the most among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar gained 4.2 percent, while the euro was the best performer, jumping 8.4 percent.

U.K. two-year yields climbed amid speculation an improving economy will prompt the Bank of England to increase interest rates earlier than it forecasts. The rate increased as much as two basis points to 0.58 percent, the highest since June 24.

U.K. government bonds lost 4.2 percent this year through yesterday, according to Bloomberg World Bond Indexes. German securities fell 1.9 percent and U.S. Treasuries declined 3 percent.

Financial Markets

Treasuries reached the cheapest level relative to stocks in 3 1/2 years yesterday. The difference between the earnings yield on the Standard & Poor's 500 Index and the 10-year Treasury yield narrowed to 3.10 percentage points, the least since May 2010, compared with a three-year average of 5.09 points.

The Securities Industry and Financial Markets Association recommends a close at 2 p.m. New York time for Treasuries today, and that trading remains shut Dec. 25 for the Christmas holiday, according to the group's website.

The cost of insuring against losses on corporate bonds was little changed after falling for seven days to the lowest in almost four years. The Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies increased 0.5 basis point to 69.5 basis points.

The PBOC auctioned 29 billion yuan ($4.8 billion) of seven-day reverse repos, according to two traders at primary dealers required to bid at the auctions. The last such cash injection was on Dec. 3, when the monetary authority added 18 billion yuan.

Mainland Companies

The MSCI Emerging Market Index of shares climbed 0.2 percent to an almost two-week high on a closing basis. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong jumped 1.8 percent, the most in a month.

The Borsa Istanbul 100 Index (XU100) jumped 0.7 percent, trimming this month's loss to 9.5 percent. The lira strengthened 0.6 percent its first advance in six days.

BlackRock Inc., the world's biggest money manager, said yesterday it has added to positions in Turkey, especially financial stocks, as valuations became more compelling following a politically driven selloff.

'We have been adding to positions in Turkey, especially in the financial sector, over the last few days, as valuations are now compelling,' Sam Vecht, head of the emerging markets specialist team at BlackRock in London, said in e-mailed comments to Bloomberg. 'Historically, in emerging markets it has paid off to be brave when others are fearful.'

Net Sales

The Thai baht fell 0.1 percent for a sixth consecutive day of declines. Overseas funds have been net sellers of Thai stocks for 22 days, the longest stretch of net sales since August 2008, according to data compiled by Bloomberg.

The yield on Ukraine's June 2014 bond rose 150 basis points to 9.26 percent after falling by a similar amount yesterday. The yield reached a record 20.92 percent on a closing basis Dec. 10 as protests flared against the government's decision to shun the European Union in favor of closer ties with Russia.

Copper advanced to $7,266 a metric ton. Prices are set to fall 8.4 percent this year, after gaining 4.4 percent last year. China is the biggest user of the metal.

To contact the reporters on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net