“Stocks climbed and commodities rallied to a six-month high after China said it will get more involved in Europe’s bailout effort. Emerging-market shares gained the most in two weeks, while the dollar weakened.
The MSCI All-Country World Index added 0.7 percent at 7:48 a.m. in New York, following a 0.4 percent drop yesterday. The MSCI Emerging Markets Index climbed 1.3 percent. Standard & Poor’s 500 Index futures gained 0.7 percent. The Dollar Index fell 0.4 percent, and the 10-year U.S. Treasury yield rose one basis point to 1.95 percent. The cost of insuring against default on European government bonds increased for a sixth day. The S&P GSCI gauge of 24 commodities advanced 0.6 percent.
China, which holds the world’s largest currency reserves, can provide help through avenues including the central bank and its sovereign wealth fund, said People’s Bank of China Governor Zhou Xiaochuan. The euro-area economy performed better than analysts anticipated, and earnings for BNP Paribas SA and Heineken NV beat estimates. U.S. industrial output probably had its biggest gain in six months in January, economists said before a Federal Reserve report today.
“China could make Europe’s problems go away,” said Peter Jolly, head of market research at National Australia Bank Ltd. in Sydney. “They have the funds. To the extent that China will participate in the European solution, it takes away some of the flight to quality in Treasuries.”
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