EU stocks ad­vance amid US bud­get-talk op­ti­mism

The Pak Banker - - Front Page -


Euro­pean (SXXP) stocks climbed, re­bound­ing from a three-month low, as US Pres­i­dent Barack Obama ex­pressed con­fi­dence that he will strike a deal with Congress on a new bud­get. U.S. in­dex fu­tures and Asian shares also rose.

HSBC Hold­ings Plc (HSBA) added 1.3 per­cent af­ter Europe's largest lender by mar­ket value said it has held talks to sell its stake in Ping An In­sur­ance (Group) Co. BP Plc (BP/) gained 2 per­cent fol­low­ing a re­port that the oil com­pany is plan­ning a 3.7 bil­lion-pound ($5.9 mil­lion) buy­back. ING Groep NV (INGA) ad­vanced 2 per­cent af­ter the Euro­pean Com­mis­sion granted it more time to sell its in­sur­ance op­er­a­tions in the re­gion.

fol­low­ing a re­port that the oil com­pany is plan­ning a 3.7 bil­lion-pound buy­back. US Pres­i­dent Barack Obama waves to me­dia af­ter his ar­rival at Don Mueang In­ter­na­tional air­port in Bangkok on Novem­ber 18, 2012.

The bench­mark Stoxx Europe 600 In­dex gained 0.8 per­cent to 264.9 at 8:30 a.m. in Lon­don, halt­ing a three-day slide. Stan­dard & Poor's 500 In­dex fu­tures in­creased 0.3 per­cent and the MSCI Asia Pa­cific In­dex ral­lied 0.9 per­cent. "Euro­pean eq­uity mar­kets are set to open higher on op­ti­mism of a U.S. fis­cal-cliff res­o­lu­tion," Jonathan Su­daria, a trader at Cap­i­tal Spreads wrote in e-mailed com­ments. "Mar­kets had feared a stale­mate, but the bit­ter stand­off that they had ear­lier priced in did not ma­te­ri­al­ize."

The S&P 500 erased its de­cline af­ter the close of Euro­pean trad­ing on Nov. 16 af­ter House Speaker John Boehner said he held con­struc­tive bud­get talks with Obama and he would ac­cept in­creased gov­ern­ment rev­enue cou­pled with spend­ing cuts.

"I am con­fi­dent we can get our fis­cal sit­u­a­tion dealt with," Obama said at a news con­fer­ence in Bangkok, where he be­gan a three-na­tion trip.

Be­fore Obama left for Asia, he met with se­nior Democrats and Republicans for talks to avoid a $607 bil­lion-pack­age of au­to­matic tax in­creases and spend­ing cuts that if al­lowed to come into force would push the coun­try into a re­ces­sion next year. Congress re­turns from its Thanks­giv­ing hol­i­day on Nov. 26. The Stoxx 600 dropped 2.7 per­cent last week, its big­gest selloff since June, as con­cern mounted that U.S. law­mak­ers would fail to avert the so­called fis­cal cliff. The gauge has lost 3.6 per­cent since the re-elec­tion of Obama on Nov. 6 set up a bud­get show­down with the Repub­li­can-con­trolled House of Rep­re­sen­ta­tives.

Gains by Euro­pean eq­ui­ties may be lim­ited as Is­rael's De­fense Min­is­ter Ehud Barak said the army was pre­pared to in­vade the Gaza Strip for the first time in al­most four years. Air strikes and rocket at­tacks have killed 71 Pales­tini­ans and three Is­raelis. Crude oil ad­vanced for a sec­ond day in New York.

In­vestors awaited a U.S. re­port that will show sales of pre­vi­ously owned houses in Oc­to­ber held near a two-year high, ac­cord­ing to the me­dian econ­o­mist es­ti­mate in a Bloomberg sur­vey. The Na­tional As­so­ci­a­tion of Real­tors pub­lishes its in­dex at 10 a.m. in Wash­ing­ton.

HSBC climbed 1.3 per­cent to 603.4 pence af­ter the bank said it has held "dis­cus­sions which may or may not lead to the sale of the shares" in the in­surer. HSBC would raise $9.5 bil­lion from its stake in China's sec­ond-big­gest in­sur­ance com­pany based on its value be­fore to­day's open in Hong Kong.

BP gained 2 per­cent to 425 pence for the big­gest con­tri­bu­tion to the Stoxx 600's ad­vance. The Sun­day Times re­ported that the com­pany will use the buy­back to lift its share price and re­pel bids from ri­vals The news­pa­per de­clined to say where it got the in­for­ma­tion. BP spokesman Mark Salt de­clined to com­ment. ING rose 2 per­cent to 6.64 eu­ros af­ter the com­mis­sion ex­tended the com­pany's dead­line to sell the in­sur­ance busi­nesses. ING pledged to re­pay state sup­port from the Dutch gov­ern­ment by 2015 un­der an amended re­struc­tur­ing plan.

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