Sun, Feb 19, 2012 - Page 10 News List

European stocks advance on Greek rescue, US data

NEWFOUND HOPE:European leaders are optimistic that a deal on another Greek bailout can be reached soon, even after Moody’s downgraded six eurozone countries

Bloomberg

European stocks rose this week, pushing the STOXX Europe 600 Index to the highest in more than six months, amid optimism the region’s finance ministers will approve a Greek rescue and US economic data beat forecasts.

The STOXX 600 added 1.8 percent to 265.93 this week, the highest daily close since July 22. The benchmark measure has rallied 24 percent from its low on Sept. 22 last year and 8.8 percent this year, as investors speculated eurozone policymakers will contain the sovereign-debt crisis.

“I don’t think that Greece will default by any means,” said Ali Mahdavi, an equities trader at Newedge Group in London. “They have to save it in order to save the eurozone. The Greece situation will be resolved sooner rather than later. Now, with more positive news and also what we’ve had from the US, stocks have rallied back up.”

German Chancellor Angela Merkel, Italian Prime Minister Mario Monti and Greek Prime Minister Lucas Papademos expressed optimism that an agreement on Greece could be reached at a meeting of the finance chiefs tomorrow.

The ministers delayed the rescue package even after Papademos won parliamentary approval on spending cuts.

All but one of the 19 industry groups in the STOXX 600 increased this week, led by a gauge of technology shares that gained 3.6 percent.

National benchmark indices rose in 15 of the 18 Western European markets. France’s CAC 40 Index added 2 percent. Germany’s DAX advanced 2.3 percent and the UK’s FTSE 100 Index increased 0.9 percent.

Moody’s Investors Service downgraded six eurozone countries on Monday, including Spain, Portugal and Italy, and threatened to cut the top “Aaa” ratings of the UK and France.

The ratings company also placed 17 banks and securities firms under review. UBS AG, Credit Suisse Group AG and Deutsche Bank AG are among lenders that may be downgraded.

In China, the central bank’s chief said the world’s second-largest economy would help the EU end the debt crisis.

“China will always adhere to the principle of holding assets of EU sovereign debt,” People’s Bank of China Governor Zhou Xiaochuan (周小川) said on Wednesday.

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