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European stocks climbed for a second day as German business confidence rose more than forecast and optimism mounted that U.S. policy makers will reach an agreement on next year’s budget. U.S. index futures and Asian shares rose.
The Stoxx 600 rose for the first time in four days yesterday as Obama changed his position on tax increases. That led to optimism U.S. lawmakers will agree on a compromise budget, preventing more than $600 billion of automatic tax increases and spending cuts -- known as the fiscal cliff -- from coming into force at the beginning of next year.
In Germany, the Ifo institute’s business climate index, based on a survey of 7,000 executives, climbed to 102.4 in December from 101.4 in November. That was the second straight increase after sentiment dropped to a 2 1/2 year low in October. Economists had predicted a gain to 102, according to the median forecast of 43 economists.
Greece had its credit rating raised by S&P following the country’s debt buyback. The ratings company cited the determination of euro-area governments to keep Greece in the 17- nation currency zone. S&P lifted the rating from selective default to B- with a stable outlook, it said in a statement yesterday. The new grade is the highest since June 2011 when the ratings company lowered the country to CCC from B.
HSBC gained 1.3 percent to 648.4 pence and Banco Santander SA added 1.2 percent to 6.03 euros. A gauge of European banking shares contributed the most to the Stoxx 600’s advance after Credit Suisse raised the lenders to overweight, meaning investors should buy the shares. National Bank of Greece SA jumped 6.4 percent to 1.33 euros.
Stada climbed 3.4 percent to 23.51 euros. Platow Brief reported that India’s Sun Pharmaceutical Industries Ltd. and an unidentified U.S. company may make bids for the German generic- drug maker.
FTSE 100 5,972.46 +36.56 +0.62%
CAC 40 3,667.3 +18.67 +0.51%
DAX 7,676.66 +23.08 +0.30%
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