Europe Stocks Rise With S&P Futures, Oil gains

Stocks in Europe rallied and the euro recovered most of its drop versus the yen as investors assessed the fallout from the worst terror attacks on European soil in almost a decade.

The Stoxx Europe 600 Index rose 0.4 percent at 9:17 a.m. London time after dropping as much as 0.8 percent. The euro was 0.2 percent weaker at 131.85 yen, having touched a six-month low, and the Canadian dollar advanced as crude oil eked out gains. Gold jumped and silver ended a run of 12 straight declines.

While the murder of at least 129 people in Paris occurred at a fraught time for global stocks, the history of terror incidents over the past 15 years shows market reactions are often sharp and short-lived. U.S. markets shut down after the 9/11 attacks and when equity trading resumed the following week, the Standard & Poor’s 500 Index slumped 12 percent in five days. By Oct. 11, it had recovered its losses.

“The reaction to such atrocities has changed a lot since the attacks on New York, Washington DC, and the skies above America in September 2001,” Kit Juckes, a strategist at Societe Generale SA in London, wrote in an e-mailed note. “The effect will be temporary.”

The CAC 40 Index of French stocks climbed 0.2 percent, while France’s 10-year bonds were little changed, with yields at 0.87 percent. Standard & Poor’s 500 Index E-mini futures climbed 0.3 percent.

Oil rose after West Texas Intermediate crude slumped 8 percent last week as investors weighed a global supply surplus against heightened geopolitical tension following the French tragedy. WTI for December was up 0.9 percent at $41.09 a barrel. Brent for January rose 0.9 percent to $44.85.

Gold climbed for the first time in five days as the Paris attacks reinvigorated its traditional role as a haven. Bullion for immediate delivery advanced 0.7 percent to $1,091.95, according to Bloomberg generic pricing. Analysts cautioned that the gains may be short-lived, with the metal’s trajectory still likely to be determined by the Federal Reserve’s monetary policy.

Silver and other precious metals were also up, while base metals continued their decline. Copper fell to a six-year low, losing as much as 1.3 percent to $4,763.50 a metric ton.

(Source: Bloomberg)