Friday, 4 November 2011

(BN) Stocks, Commodities Rise on ECB Rate Cut as Leaders Press Greece

Bloomberg News, sent from my iPad.

Stocks, Commodities Rise on ECB Rate Cut as Leaders Press Greece

Nov. 3 (Bloomberg) -- Stocks and commodities rallied, while Treasuries and the dollar slid, after the European Central Bank unexpectedly cut interest rates and the region's leaders ratcheted up pressure on Greece to accept a bailout.

The Stoxx Europe 600 Index added 2 percent at 9:30 a.m. in New York and the Standard & Poor's 500 Index gained 0.7 percent. The euro was little changed against the dollar, after gaining as much as 0.6 percent. Greek two-year yields climbed to 107 percent. Oil gained 1.2 percent to $93.62 a barrel, and copper rebounded.

ECB President Mario Draghi, chairing a meeting of the bank's governing council for the first time, cut the benchmark rate by 25 basis points to 1.25 percent. Greek Prime Minister George Papandreou, who triggered a two-day rout in global stocks after saying he wanted the nation's voters to decide on the bailout in a referendum, won't resign his post and plans to speak in Parliament today, two officials with the ruling Pasok party said, after European Union officials raised the prospect of Greece exiting the euro currency union.

"Market participants are speculating that the Greek prime minister has lost the majority and this could lead to a cancellation of the referendum and Papandreou's possible resignation," said Stephane Ekolo, chief European strategist at Market Securities in London. "From a market perspective, it seems to be good news. It somehow reduces uncertainty and may pave the way for the implementation of the austerity measures."

Beating Estimates

More than ten shares gained for every one that fell in the Stoxx 600. Swiss Re Ltd., the world's second-biggest reinsurer, jumped 6.1 percent after reporting better-than-estimated earnings. Cable & Wireless Communications Plc jumped 11 percent after first-half profit rose.

German and French leaders holding emergency talks on the eve of a Group of 20 summit today in Cannes, France, withheld 8 billion euros ($11 billion) of assistance for Greece. European leaders yesterday warned Greece will surrender all European aid if it votes against a bailout package agreed last week to contain the crisis.

To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net

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