NEW YORK (MarketWatch) � Commodity stocks rallied Thursday on dovish comments from the New York Fed�s president, and as speculation on China�s GDP raised hopes for the country�s growth and resources appetite.
The materials sector XX:GSPMI �advanced 3%, leading other sectors of the S&P 500 SPX . Among the top gainers, Cliffs Natural Resources Inc. CLF shares rose 6.3%, while Freeport-McMoRan Copper & Gold Inc. FCX � increased 6%. Shares of United States Steel Corp. X �were up 6%, and Allegheny Technologies Inc. ATI �climbed 5%.
William Dudley, New York Fed�s president, said Wednesday night that the U.S. economy is not yet strong enough, inspiring investors� hopes that the Fed could accommodate another round of easing.
Commodities recorded across-the-board gains as demand for hard assets increased against the weakened dollar.
Gold for June delivery GCM2 �gained $20.30, or 1.2%, to $1,680.60 on the Comex division of the New York Mercantile Exchange.
Copper futures for May delivery �advanced 7 cents, or 2%, at $3.71 a pound.
The base metal earned a nickname Dr. Copper for its ability to gauge economic health, as it is used mainly in construction and manufacturing. Higher demand for copper suggests expansion in business activity.
A tail wind for commodity prices also came from speculators� bets that China�s GDP could come in better than expected.
Beijing is expected to release data on gross domestic product on Friday. Economists polled by Dow Jones Newswires estimate that China�s first-quarter GDP grew 8.3% from a year earlier, down from 8.9% fourth quarter 2011 and 9.2% for 2011.
Concerns over China�s growth have been pressuring resources stocks in global markets. The World Bank on Thursday cut China�s growth outlook this year to 8.2% from 8.4%. Earlier this week, China reported lower import activity in March, prompting concerns over the domestic demand in the world�s second largest economy.
At the same time, China�s bank lending in March hit a record high, rising to 1.01 trillion yuan ($160 billion). The surge in lending reflected Beijing�s efforts to boost credit expansion to support the slowing economy, giving hope that the country will avoid a hard landing.
Recent forecasts of China�s commodity appetite remained favorable for resources stocks. Aluminum products maker Novelis Inc. expects aluminium demand in China to grow at an average 8% per year over the next five years, driven by the Chinese auto sector and increasing aluminium use in vehicles.
The total mill product orders increased by 9% year-on-year during the Jan-March period, The Aluminium Association said.
Gold shipments from Hong Kong to China were up 20% month-to-month in March and substantially higher than last February�s 3.1 tonnes, Barclays said in its report. The shipments are below the record set in November, at over 100 tons, but remain elevated.
No comments:
Post a Comment