Stocks and copper rise on China and Australia report

Seoul: Stocks snapped a two-day decline Wednesday, US index futures rose and copper rallied after China's manufacturing and Australia's economy grew faster than economists estimated. The Swiss franc weakened after reaching a record against the euro.

The MSCI World Index climbed 0.8 per cent at 10:34 am in London. Futures on the Standard & Poor's 500 Index jumped 1.1 per cent. Copper increased 1.2 per cent and nickel advanced 1.8 per cent.

The Swiss franc ended a two-day advance against the euro, and the Australian dollar strengthened against all 16 of its major counterparts.

China's purchasing managers' index rose to 51.7 from 51.2, exceeding forecasts, while Australia's economy expanded 1.2 per cent from the first quarter, according to government data released yesterday. The Federal Reserve signalled it was unlikely to begin a second round of debt purchases imminently, according to minutes of its last meeting released Wednesday.

"Asian growth is still much better than the rest of the world," said Manpreet Gill, a Singapore-based strategist at Barclays Wealth, which has $229 billion in assets. "Investors still need to be selective when buying equities as the global economic picture still looks tentative."

The Stoxx Europe 600 Index rose 1 per cent as more than four shares rose for every one that fell. The MSCI Asia Pacific Index gained 1.3 per cent and the MSCI Emerging Markets Index of 21 developing countries advanced 0.8 per cent.

The Swiss franc depreciated 0.5 per cent to 1.2939 per euro and was little changed at 1.0146 per dollar. Higher-yielding currencies rose against the dollar and the yen, with the Australian dollar climbing 1.3 per cent to 90.22 US cents. The euro was 0.6 per cent higher at $1.2754, while the yen was little changed at 84.16 per dollar.

Yields on 10-year Treasury notes increased 3 basis points to 2.51 per cent, while those on German bunds jumped 5 basis points to 2.17 per cent.

The US Institute for Supply Management's factory index probably dropped to 52.7 in August from 55.5 in July, according to the median estimate of 78 economists surveyed by Bloomberg News.

Readings greater than 50 signal growth. The figures are due at 10am New York time.

China's manufacturing growth boosted raw materials prices, with the S&P GSCI Total Return index of 24 commodities rising 0.2 per cent, the first increase this week. Crude oil for October delivery climbed 1 percent to $72.63 a barrel on the New York Mercantile Exchange.

Gold added 0.3 per cent to $1,250.95 an ounce, increasing to within $15 of the record set in June.

The cost of credit-default swaps to protect Portuguese sovereign debt fell 4.5 basis points to 340.5, according to data provider CMA, as the government prepared to auction as much as 1 billion euros of six- and 12-month bills.

The Markit iTraxx Crossover Index of default swaps on 50 mostly junk-rated European companies tumbled from a six-week high, dropping 9.9 basis points to 522.3, Markit Group Ltd. prices show.