European stock futures climbed, indicating the Stoxx Europe 600 Index may rise for a third day, after Germany and France assured investors that Greece will remain a member of the euro. Asian shares gained while U.S. futures were little changed. Luxury-goods makers might be active after a report that China may cut taxes on the industry. Kingfisher Plc (KGF) may move after Europe’s largest home-improvement retailer reported earnings that topped analyst estimates. ArcelorMittal (MT), British Sky Broadcasting Group Plc (BSY) and Associated British Foods Plc (ABF) may climb as analysts recommended the shares. Futures on the Euro Stoxx 50 Index expiring in September advanced 1.3 percent to 2,109 at 7:23 a.m. in London, while FTSE 100 Index futures rose 1 percent. The MSCI Asia Pacific Index increased 1.1 percent while Standard & Poor’s 500 Index futures slipped 0.1 percent after the benchmark gauge for U.S. equities jumped 1.4 percent yesterday. “European markets are set to open higher after Germany and France affirmed their commitment to keep Greece within the euro,” said Zahid Mahmood, a senior trader at London Capital Group. “Given we are not seeing much more than rhetoric at the moment, many people still expect Greece to default and see the move up as nothing more than a relief rally.” French President Nicolas Sarkozy and German Chancellor Angela Merkel said late yesterday they are “convinced” Greece will stay in the euro area as they faced international calls to step up efforts to fight the region’s debt crisis. Deficit Targets The leaders of the euro region’s two biggest economies issued the statement following a phone conversation with Greek Prime Minister George Papandreou. Papandreou committed to meet deficit-reduction targets demanded as a condition for an international bailout, according to statements from governments in Athens, Berlin and Paris. The benchmark Stoxx Europe 600 Index rallied for a second day yesterday amid speculation China may still buy euro-area government bonds even after Premier Wen Jiabao said indebted countries must not rely on bailouts. China is willing to buy bonds from countries involved in the sovereign debt crisis “within its capacity,” Zhang Xiaoqiang, a vice chairman of the National Development and Reform Commission, said at the World Economic Forum in the Chinese city of Dalian today. The NDRC is China’s top economic planning agency. Italy Austerity In Italy, Prime Minister Silvio Berlusconi won final parliamentary approval for a 54 billion-euro ($74 billion) austerity package that seeks to balance the budget by 2013 in an attempt to stem the nation’s surging borrowing costs. Shares of luxury companies may be active as the National Business Daily reported that China may issue a plan to cut luxury-goods taxes by the end of the year. Tariffs on cosmetics will be cut first and clothes and leather goods might follow, the newspaper said, citing an unidentified person familiar with the situation. Shares of Hermes International (RMS) SCA, the French maker of Kelly handbags and silk scarves, will be suspended today at the company’s request pending an announcement on a Paris appeal court ruling regarding its exemption from the requirement to submit a full takeover offer. Kingfisher may move after the company reported a 24 percent increase in first-half adjusted pretax profit to 439 million pounds ($692 million). That beat the average analyst estimate of 408 million pounds. ArcelorMittal may advance after Citigroup Inc. raised its recommendation for the world’s largest steelmaker to “buy” from “hold.” BSkyB, the U.K.’s biggest pay-television provider, was upgraded to “overweight” from “equal weight” at Morgan Stanley. Shares of AB Foods, which this week said second-half earnings will meet its expectations, was upgraded by UBS AG to “buy” from “neutral.” Hennes & Mauritz AB (HMB) may increase after the clothing retailer reported an 8 percent gain in total sales for August. To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net To contact the editor responsible for this story: Andrew Rummer in London at arummer@bloomberg.net

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