Bloomberg News

European Stocks Gain, Euro Weakens Amid Greece Debt-Swap Talks

February 01, 2012

Feb. 1 (Bloomberg) -- European stocks rose for a second day and the euro pared declines as Greece approached a debt-swap agreement with its private creditors. U.S. equity futures erased losses, while oil and copper advanced.

The Stoxx Europe 600 Index climbed 0.5 percent as of 8:11 a.m. in London. The euro fell 0.2 percent against the dollar. Standard & Poor’s 500 Index futures were little changed after losing as much as 0.3 percent. Oil added 0.3 percent and wheat jumped to a four-month high. South Korea’s won dropped 0.3 percent and Australia’s S&P/ASX 200 Index sank 0.9 percent as economic data showed weakening growth across Asia.

The Greek government is “one step” from a debt-swap deal with private bondholders, Finance Minister Evangelos Venizelos told reporters in Athens yesterday. Creditors negotiating with Greece may get a sweetener tied to a revival in economic growth that would ease the impact of accepting a lower interest rate on the new bonds, people with knowledge of the talks said.

“There are some concerns that talks may continue to drag on,” Lee Wai Tuck, a currency strategist at Forecast Pte. in Singapore, said about the Greek debt negotiations. “The longer it drags on, the more likely the crisis will continue to worsen.”

Ten-year Treasury yields climbed one basis point to 1.81 percent. Data later today may show the Institute for Supply Management’s factory index rose to 54.5 last month, the most since June, from 53.1 in December, according to a Bloomberg survey of economists. A reading above 50 indicates growth.

Amazon Shares

Amazon.com Inc. shares may be active. The world’s largest Internet retailer fell as much as 11 percent in extended trading yesterday after sales missed estimates, signaling that its investments in media services, Kindle devices and shipping promotions have been slow to pay off.

The euro fell as much as 0.5 percent to 99.29 yen, the weakest since Jan. 23. Portugal will sell 105-day and 168-day bills today. Standard & Poor’s increased the number of Portuguese banks on “creditwatch negative” yesterday and the nation’s 10-year bond yield reached a euro-era record 17.39 percent.

The Shanghai Composite Index lost 1.1 percent, falling to the lowest in two weeks. China’s purchasing managers’ index rose to 50.5 from 50.3 in December, the statistics bureau and logistics federation said in a statement today. The report, which exceeded economists’ estimates, cuts the need for “aggressive” policy easing, Fan Cheuk Wan, head of Asia- Pacific research at Credit Suisse Private Banking, said in an interview on Bloomberg Television in Hong Kong.

Fujitsu Earnings

Fujitsu Ltd. sank 2 percent. Japan’s largest computer services provider cut its profit forecast 42 percent as floods in Thailand disrupted output of computer components. Sumitomo Heavy Industries Ltd. tumbled 9.8 percent. The maker of heavy machinery cut its net-income forecast by 28 percent, citing a strong yen and an economic slowdown in China.

Westpac Banking Corp. and National Australia Bank Ltd. dropped at least 0.8 percent. An index measuring the weighted average of prices for established houses in eight major cities slid 4.8 percent from a year earlier, according to the Australian Bureau of Statistics, the biggest calendar-year drop since the data began in March 2002.

South Korea’s won retreated 0.3 percent to 1,126.35 per dollar. Exports shrank 6.6 percent from a year earlier in January after a revised 10.8 percent rise in December as the Lunar New Year holiday disrupted shipments, the Ministry of Knowledge Economy said in a statement today.

Wheat for March delivery advanced as much as 1.4 percent to $6.75 a bushel on the Chicago Board of Trade, the highest price for a most-active contract since Sept. 21. Temperatures in parts of Russia and Ukraine may drop as low as minus 15 degrees Fahrenheit (minus 26 degrees Celsius) this week, threatening to damage winter wheat not protected by snow, forecaster Telvent DTN said in a report yesterday.

--With assistance from Mariko Ishikawa in Tokyo. Editors: Nick Gentle, Darren Boey

To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Masaki Kondo in Singapore at mkondo3@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net


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