Tuesday, June 21, 2011

Stocks Rally, Euro Strengthens Before Greek Vote; Oil Advances

By Stephen Kirkland

June 21 (Bloomberg) -- Stocks gained, with European shares rebounding from a three-month low, and the euro strengthened as the Greek government prepared to face a confidence vote that may determine whether it avoids a default. Oil and palladium gained.

The Stoxx Europe 600 Index climbed 0.5 percent at 10:20 a.m. in London, and the MSCI Asia Pacific Index rallied 1.3 percent. Standard & Poor's 500 Index futures rose 0.5 percent. The euro appreciated 0.1 percent to $1.4318, while the Dollar Index fell 0.3 percent. The Markit iTraxx SovX Western Europe Index of default swaps on 15 governments slid to the lowest in a week. Oil advanced 1.3 percent and palladium jumped 1.3 percent.

Today's confidence vote in Prime Minister George Papandreou is likely to determine how soon the nation can win international aid to shore up its finances. Luxembourg Prime Minister Jean- Claude Juncker said yesterday the Greek leader pledged to do everything to enact austerity measures.

"The whole market is oversold and hence the bounce on a hint that one of the issues weighing on the market may be close to a resolution," said Prasad Patkar, a money manager who helps oversee about $1.7 billion at Platypus Asset Management Ltd. in Sydney. "Greece is arguably the biggest of these issues because of its ability to cause severe damage to markets."

The Stoxx 600 gained the most in a week after the gauge's valuation compared with its companies' reported earnings dropped to the cheapest since 2008 yesterday. Petropavlovsk Plc, a producer of gold in Russia, and Whitbread Plc, the U.K. hotel and restaurant operator, jumped more than 6 percent in London after reporting increased sales. SABMiller Plc fell 3.2 percent as Foster's Group Ltd. rejected its A$9.5 billion ($10 billion) takeover offer as too low.

Emerging Markets

The gain in S&P 500 futures indicated the U.S. gauge will rise for a fourth day. A report at 10 a.m. New York time today may show existing home sales dropped in May to the lowest level this year, according to a Bloomberg survey on economists, keeping pressure on the Federal Reserve to maintain stimulus measures. The Fed starts a two-day meeting today.

The euro appreciated 0.3 percent versus the yen, climbing for the second consecutive day. The dollar weakened against all but two of 16 major currencies tracked by Bloomberg. The Australian dollar fell versus all its major peers after the nation's central bank said in minutes of this month's meeting that it is "prudent" to keep interest rates unchanged.



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