European stocks rose for the first time in four days and the euro reached a two-month high on speculation regional policy makers will approve a rescue package for Greece. Chinese stocks slid after inflation unexpectedly accelerated.
The Stoxx Europe 600 Index added 0.2 percent as of 8:04 a.m. in London. The Hang Seng China Enterprises Index fell 0.3 percent, while Standard & Poor’s 500 Index futures dropped 0.2 percent. The euro strengthened 0.2 percent, while the Dollar Index retreated. Spanish 10-year government bond yields rose four basis points to 5.26 percent. Oil advanced for a third day, gaining 0.3 percent.
A default by Greece won’t be on the table at an emergency meeting of euro-area leaders today, according to a European official familiar with the discussions. Greek Finance Minister Evangelos Venizelos said he hoped they would make a “positive decision” on a new loan package. Chinese consumer prices rose 4.5 percent in January from a year earlier, exceeding all 33 forecasts in a Bloomberg News survey of economists.
“History tells us that a deal in Greece will be reached at the last minute,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “A lot of indications show they are heading in that direction even though there are endless delays.”
Debt Crisis
Greece faces a 14.5 billion-euro bond payment on March 20 and is struggling to secure financing to avert a collapse of the economy. There are still doubts on the agreement needed to secure the 130 billion-euro ($172 billion) rescue package for Greece, Venizelos said. Greek leaders have effectively agreed on all the issues except for that of cuts to pensions, Panos Beglitis, a spokesman for the Pasok socialist party, told reporters.
Credit Suisse Group AG (CSGN) dropped 3.5 percent. The second- biggest Swiss bank said it had a loss in the fourth quarter for the first time since 2008, hurt by “adverse markets” and costs to reorganize the investment bank. Rio Tinto Group (RIO) fell 1.8 percent. The world’s third-largest mining company swung to a second-half loss, its first in four years, after taking a $8.9 billion one-time charge on the value of its aluminum business.
Bull Market
Global stocks entered a bull market yesterday as the MSCI All-Country World Index extended its gain from its October low to 20 percent. Profits beat projections at 49 percent of the 821 companies in the global benchmark that released quarterly results since Jan. 9, according to data compiled by Bloomberg.
Banks led declines in the Hang Seng China Enterprises Index, which tracks mainland companies listed in Hong Kong. China’s inflation quickening for the first time in six months adds pressure on officials to refrain from any immediate additional cut in banks’ reserve requirements.
“Inflation is supposed to be on a slowing trend,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “The government is still reluctant to ease policies aggressively. The twist on the European debt crisis will have a negative impact on investors’ appetite for risky assets.”
Bank of England Governor Mervyn King may pump another 50 billion pounds ($79 billion) into the U.K. economy today as he boosts protection for a nascent recovery from the threat posed by Europe’s debt crisis. The nine-member Monetary Policy Committee will raise the target for bond purchases to 325 billion pounds, more than a quarter of current outstanding gilts, according to 34 of 50 economists in a Bloomberg survey.
Europe Rates
The euro touched $1.3313, the highest since Dec. 12. The European Central Bank will probably keep the benchmark interest rate unchanged at 1 percent today, a separate Bloomberg survey showed.
The Nikkei 225 Stock Average retreated 0.2 percent. Japan’s machinery orders fell 7.1 percent in December from the previous month, the biggest drop in three months, according to data from the Cabinet Office.
Nissan Motor Co. (7201) fell 1 percent. Japan’s second-biggest automaker reported third-quarter operating profit that missed analysts’ estimates. The automaker’s European operations had a 1.4 billion yen loss in the quarter as a debt crisis sapped demand, according to a statement from the company.
Oil rose to $99.20 a barrel. U.S. refineries operated at 83 percent of capacity, up 1 percentage point from the week before, according to the Energy Department. Analysts projected a 0.4 percentage point decrease.
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
