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Monday, 12 November 2012
European Stocks Fluctuate as Ministers Meet on Greek Aid
By Tom Stoukas - Nov 12, 2012 2:00 PM GMT+0400
European stocks fluctuated between gains and losses as finance ministers prepared to discuss Greek aid after lawmakers approved the country’s 2013 budget. Asian shares slid, while U.S. index futures advanced.
The Stoxx Europe 600 Index (SXXP) was almost unchanged at 270.28 as of 9:58 a.m. inLondon. The gauge has fallen 1.7 percent since Barack Obama’s re-election as U.S. president focused investor attention on the so-called fiscal cliff of impending American tax increases and spending cuts. Standard & Poor’s 500 Index futures climbed 0.2 percent today, while the MSCI Asia Pacific Index lost 0.4 percent.
Customers wait to be served inside a TIM store, the mobile unit of Telecom Italia SpA, in Milan. Photographer: Alessia Pierdomenico/Bloomberg
“Until there is clarity on the fiscal cliff, markets will be nervous,” said Nicolaas Marais, head of multi-asset investments and portfolio solutions at Schroders Plc in London, which oversees $320 billion. “There is a commitment to solve the issues, but markets will have a wait-and-see mode and be very cautious until that is in place. Between the fiscal cliff and some of the challenges in Greece, you are in a risk-off mode at the moment.”
The Stoxx 600 has rallied 15 percent from this year’s low on June 4 as European Central Bank President Mario Draghi said he would do everything to protect the euro and the Federal Reserve opted for a third round of asset purchases.
Euro-area finance ministers will meet at 5 p.m. in Brussels today. While ministers probably won’t approve 31.5 billion euros ($40 billion) in fresh loans to Greece, the maturing of 5 billion euros of Greek bills on Nov. 16 won’t lead to an “accidental default,” a European official said last week.
Greek Prime Minister Antonis Samaras won a vote on Greece’s 2013 budget, with 167 lawmakers for and 128 against. The nation’s fiscal plan, which forecasts a deficit of 5.2 percent of gross domestic product and a sixth year of contraction, is designed to regain the confidence of its euro-area and International Monetary Fund creditors.
Japan’s third-quarter gross domestic product fell an annualized 3.5 percent, the most since the earthquake and tsunami in early 2011, the Cabinet Office said. The median of 23 estimates in a Bloomberg survey was for a 3.4 percent drop.
In China, new yuan loans unexpectedly fell in October from a year earlier, damping signs the world’s second-biggest economy is recovering after a seven-quarter slowdown. Banks extended 505.2 billion yuan ($81.1 billion) of local-currency loans, the Beijing-based People’s Bank of China said. The median estimate was 590 billion yuan in a Bloomberg News survey of 28 analysts.
China’s exports increased 11.6 percent from a year earlier, the Beijing-based customs administration said in a statement today. That compared with the 10 percent estimate in a Bloomberg News survey of economists. Imports rose 2.4 percent, the same pace as the previous month. The trade surplus widened to $32 billion, the biggest in almost four years.