European Stocks Climb on China Stimulus Optimism

European stocks rose, snapping four days of losses, amid speculation China will introduce additional economic stimulus. U.S. index futures were little changed and Asian shares gained.

Roche Holding AG increased 0.6 percent after deciding to close a U.S. laboratory and cut jobs. Xstrata Plc fell after its second-largest shareholder demanded a higher bid from Glencore International Plc.

The Stoxx Europe 600 Index advanced 0.3 percent to 243.26 at 10:04 a.m. in London. The benchmark gauge has climbed 4 percent since its 2012 low on June 4 as Greece formed a coalition government after its second election in six weeks. Standard & Poor’s 500 Index futures fell less than 0.1 percent, while the MSCI Asia Pacific Index increased 0.8 percent.

The China Securities Journal said the country may introduce “more proactive” policies to ensure stable growth in the world’s second-largest economy.

Separately, the official Xinhua News Agency said China will promote tie-ups between the mainland financial markets and Hong Kong and increase cooperation in investments overseas and infrastructure, the official Xinhua News Agency said.

The Chinese government will encourage joint ventures between the Shanghai and Shenzhen stock bourses and their Hong Kong counterpart, and allow the listing of exchange-trade funds in both places, the agency said.

German Chancellor Angela Merkel faces an increasingly united bloc of euro-area nations at a two-day summit starting tomorrow, demanding more drastic measures to fight the crisis and preserve the euro.

Merkel yesterday told members of her Christian Democratic bloc that she is unhappy with proposals drawn up by European Union President Herman Van Rompuy for the EU summit, a party official who was present at the meeting. The plan has the wrong balance between shared liability and sharing control, Merkel told lawmakers, according to the official.

Germany’s rating was cut to A+ from AA- by Egan Jones Ratings Co. yesterday after the markets closed. Merkel continues to cause tension among EU members by resisting calls for joint euro bonds, the ratings agency said, and the country may be outvoted by European Central Bank members.

Roche gained 0.6 percent to 163.60 Swiss francs as it said late yesterday that it will close its 80-year-old Nutley, New Jersey laboratory, where the sedative Valium was developed, cutting about 1,000 U.S. jobs.

Xstrata lost 2 percent to 770 pence, the lowest since October, and Glencore fell 3.6 percent to 291.75 pence, the lowest price since it sold its shares to the public in May 2011. Qatar Holding LLC demanded Glencore’s 6.9 billion-pound bid for its target be increased by 16 percent. Qatar, which owns a 10.36 percent stake in Xstrata, wants the bid raised to 3.25 Glencore shares for each of Xstrata’s, according to a statement yesterday.

Source: Bloomberg