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European stocks dropped, with the Stoxx Europe 600 Index trimming a six-month high, as Greece struggled to reach a deal with its international creditors.
Greece’s Prime Minister Lucas Papademos struck a tentative deal with the leaders of the three parties supporting his interim government to boost economic competitiveness and extend spending cuts. The politicians agreed in a five-hour meeting yesterday to make additional reductions this year equal to 1.5 percent of gross domestic product.
The policy makers meet tomorrow to work on the detail of plans for bank recapitalizations, ensuring the viability of pension funds and measures to reduce wage and non-wage costs to boost competitiveness.
The euro area’s debt crisis will cut China’s economic expansion almost in half if it worsens, a scenario that would warrant “significant” fiscal stimulus from the nation’s government, the International Monetary Fund said.
National benchmark indexes declined in 15 of the 18 western-European markets today. The U.K.’s FTSE 100 Index slipped 0.2 percent. France’s CAC 40 Index declined 0.7 percent, while Germany’s DAX Index fell less than 0.1 percent.
Copper declined on the London Metal Exchange after the IMF released its growth prediction for the world’s largest consumer of the metal. Vedanta, India’s biggest copper producer, slid 3.1 percent to 1,317 pence and Rio Tinto Group, the world’s third- largest mining company, fell 1.1 percent to 3,946 pence.
Glencore retreated 4.5 percent to 460.75 pence as the Financial Times reported that the company may offer an 8 percent premium over Xstrata’s closing share price on Feb. 1. The newspaper cited people familiar with the merger discussions. Xstrata declined 1.7 percent to 1,261.5 pence in London.
Societe Generale slid 2.9 percent to 23.55 euros, while Credit Agricole fell 2.7 percent to 5.18 euros.
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