European stocks slid for a second day, while the euro weakened against the dollar and yen as German and French leaders failed to convince investors they can resolve the region’s debt crisis and revive growth. The Swiss franc strengthened, while copper and oil advanced. The Stoxx Europe 600 Index dropped 0.9 percent as of 8:07 a.m. in London, while Standard & Poor’s 500 Index futures lost 0.6 percent. The euro depreciated 0.5 percent versus the yen and slid 0.3 percent against the dollar. The franc jumped for the first time in five days against Europe’s shared currency. Wheat rallied a third day, copper increased as much as 1 percent and crude climbed 0.8 percent in New York. Leaders of the two largest euro-region economies said they plan to resubmit a financial-transaction tax that was rejected last year, while rebuffing calls for joint euro borrowing and the expansion of the 440 billion-euro ($632 billion) rescue fund. Data yesterday showed Germany’s growth almost stalled last quarter, while an economic report today will probably indicate European inflation slowed. “The problems are pretty serious and deep, and let’s face it, there has not been any concrete proposals so far,” Rajiv Jain, a New York-based money manager who oversees about $15 billion at Vontobel Asset Management, said in a Bloomberg Television interview. “The question is, how fast does the disease spread through the rest of Europe? How do you resuscitate growth?” About seven shares declined for every one that gained on the Stoxx 600, which slid 0.1 percent yesterday. After a two- hour meeting yesterday, German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed to press for closer euro-area cooperation, tougher deficit rules and a harmonization of corporate tax rates. Transaction Tax Sarkozy said finance ministers would be charged with developing a transaction tax, which he called a “priority.” EU finance chiefs failed to agree in September 2010 on such a measure, which would require unanimity among governments. The euro weakened to 110.05 yen from 110.65 yen yesterday and slid to $1.4364 from $1.4407. Data today will show the region’s consumer price index fell 0.6 percent in July from the previous month, according to economists surveyed by Bloomberg. Figures yesterday showed Germany’s economy expanded 0.1 percent from the first quarter, while gross domestic product in the euro area rose a smaller-than-forecast 0.2 percent from the first quarter. The Swiss franc jumped 1.3 percent against the euro. It surged 1.1 percent versus the dollar, halting a five-day drop. The franc gained even as the Swiss central bank said it will take more measures if needed to combat the currency’s strength. Asian Shares MSCI’s Asia Pacific Index rose 0.1 percent after earlier falling as much as 0.5 percent. Losses in the three weeks ended Aug. 12 dragged valuations on the regional index down to 12.1 times estimated profits last week, the lowest since December 2008, according to data compiled by Bloomberg. “We see the negative newsflow likely to come out of Europe rather than anywhere else in the world these days, but if you look outside of that, things are starting to get a little better,” Steve Brice, chief investment strategist at Standard Chartered Plc, said in a Bloomberg Television interview from Singapore. “We do prefer Asia to the developed world.” Hong Kong’s Hang Seng Index jumped 0.7 percent after companies from China Coal Energy Co. to China Minsheng Banking Corp. reported higher earnings. Bank of East Asia Ltd. (23) paced a rally among lenders and brokerages after Chinese Vice Premier Li Keqiang, who is visiting Hong Kong, said the nation will start an exchange-traded fund linked to the city’s stocks. Woodside, Brambles Woodside Petroleum Ltd. climbed 1.2 percent after Australia’s second-biggest oil and natural gas producer posted first-half profit that beat analysts’ estimates. Brambles Ltd., the world’s biggest supplier of wooden pallets, rose 4.4 percent after announcing plans to sell its Recall document-storage unit and forecasting a profit gain of as much as 28 percent. The S&P 500 fell 1 percent yesterday, halting its biggest three-day rally since March 2009. Treasury 10-year yields were little changed at 2.21 percent, following a nine-basis-point drop yesterday. Data today may show prices paid to U.S. producers rose 0.1 percent in July after falling 0.4 percent the previous month, according to the median forecast of economists surveyed by Bloomberg. St. Louis Federal Reserve Bank President James Bullard said yesterday the Fed’s pledge to keep rates at a record low through at least mid-2013 shouldn’t be seen as a signal for a new round of central bank bond purchases. Wheat for December delivery rose 1 percent to $7.595 a bushel. Futures are extending a two-day, 2.7 percent rally on speculation that persistent dry weather in the U.S. Great Plains will reduce the number of acres farmers will sow with winter crops. Copper rose as much as 1 percent to $8,920 a metric ton on the London Metal Exchange, while crude oil climbed 0.8 percent to $87.34 a barrel on the New York Mercantile Exchange, rebounding from yesterday’s 1.4 percent drop. To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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