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European Stocks Rise as Greek Default Concern Eases

Source: Bloomberg

European stocks rose, extending Wednesday’s biggest rally for the Stoxx Europe 600 Index in three months, on mounting speculation that Greece will avoid a default. Asian equities and US futures also advanced.

London Stock Exchange Group Plc jumped 5.4 per cent after scrapping its bid for TMX Group Inc and UBS AG said the bourse may now be a bid target. Lloyds Banking Group Plc surged 9.1 per cent after the UK’s biggest mortgage lender said it will make savings of GBP1.5 billion (US$2.4 billion) by 2014. BG Group Plc surged 4.6 per cent after doubling its estimate of reserves and resources in the Santos Basin in Brazil.

The Stoxx 600 rose 0.2 per cent to 270.36 at 10:43 am in London, extending Wednesday’s 1.7-per cent advance, the largest gain since March 21, after Greek lawmakers approved a package of austerity measures to help secure financial aid.

“The recent pullback provides a buying opportunity,” said Robert Buckland, chief global equity strategist at Citigroup Inc in London in a report to clients Thursday. “Despite a slowdown, we expect the economic and earnings recovery to be sustained.”

Greek Prime Minister George Papandreou must Thursday win a second ballot to execute measures ranging from tax increases to asset sales after he clinched victory on a bill setting out his strategy to cut the deficit Wednesday. A debate on the second stage of the austerity package resumed at 10 am in Athens. No time has been given for the final vote.