Italy’s 10-year yield rose four basis points from the close on Dec. 23 to 1.98 percent, as of 9:39 a.m. in London. The euro was near a two-year low. Greece’s ASE Index (ASE) sank 7.8 percent. The Stoxx Europe 600 Index slipped 0.3 percent and Standard & Poor’s 500 Index futures were little changed. The ruble dropped 2.9 percent against the dollar and crude oil gained as fighting continued in Libya.
Greece’s prime minister has a final opportunity to have his presidential candidate confirmed and prevent an early election that may pose a risk to the nation’s bailout. Crude-storage tanks at Libya’s largest oil port were on fire after fighting between militias and forces loyal to the internationally recognized government. New regulations in China will give banks greater scope to lend by lowering loan-to-deposit ratios.
“There is still a sense that Europe is not fixed,” said Ben Kumar, who helps manage $10 billion at Seven Investment Management LLP in London. “Investors appear to be waiting for action to be taken by the European Central Bank in January and are happy that European markets are just about positive for the year.”
Greek Vote
Greek Prime Minister Antonis Samaras is making a third and final attempt to get his presidential candidate, Stavros Dimas, confirmed. Failing could usher in Syriza, an anti-austerity party that seeks to renegotiate the nation’s debt, threatening the stability of Europe’s currency union and the start of the ECB’s bond-buying program. The next ECB meeting is Jan. 22.
Greece’s parliament was scheduled to vote at noon in Athens with Samaras needing 180 votes in the 300-seat chamber to appoint his nominee. Failure to elect Dimas will lead to a general election in late January or early February, a few weeks before the nation’s 240 billion euros ($292 billion) bailout expires.
Spanish bonds fell with Italy’s before the vote. The yield on Spain’s 10-year securities increased three basis points, or 0.03 percentage point, to 1.70 percent from the close on Dec. 23. The rate on Greece’s 10-year bonds was at 8.66 percent, 19 basis points higher than the Dec. 23 close.
The ASE in Greece slumped the most among 18 western-European markets, heading for its lowest close since November 2012. Short bets on an exchange-traded fund tracking Greek shares climbed this month to the highest level since May 2012.
Italy, Spain
Benchmark stock indexes of Italy and Spain slid more than 0.9 percent. Germany’s DAX Index declined 0.7 percent. The volume of Stoxx 600 shares changing hands was 73 percent below the 30-day average, data compiled by Bloomberg show.
Stoxx 600 commodity producers gained 1.4 percent today, the most among 19 industry groups, with Rio Tinto Group climbing 1.7 percent and BHP Billiton Ltd. rising 2.3 percent.
Health-care stocks added 0.8 percent as a group, led by a 3.1 percent jump in Novo Nordisk A/S as the U.S. Food and Drug Administration approved its Saxenda weight-loss drugs.
Telefonica SA slid 2 percent after newspaper El Pais reported the phone company may rethink its investments and calendar for rolling out a new fiber-optic network in Spain.
Snap Election
Futures on the S&P 500 expiring in March were little changed after the gauge climbed for a second week. The Dow Jones Industrial Average and Russell 2000 Index of smaller U.S. stocks also closed at records. The Nasdaq Composite Index ended at its highest level since March 2000.
The euro traded at $1.2189 after falling to $1.2165 on Dec. 23, its weakest point since August 2012. The ruble declined after rallying 8.4 percent last week. Russia’s Micex index (INDEXCF) rose with oil.
Sweden’s krona rallied after the government reached an accord with the opposition to avert a snap election and curb the influence of the anti-immigration Sweden Democrats. The Nordic currency appreciated 0.6 percent to 7.8077 per dollar, having touched 7.8689 on Dec. 26, the weakest level since 2010.
The dollar is set for an annual gain versus all of its 31 major counterparts for the first time in data going back to 1989, buoyed by an improving economy and the Federal Reserve’s plan to raise interest rates next year. The ruble plunged the most among the major currencies amid geopolitical turmoil in eastern Europe and a decline in oil prices.
China Lending
The Hang Seng China Enterprises Index jumped the most since Nov. 2013 as China Life Insurance Co. rallied. The Shanghai Composite Index reached the highest level since January 2010.
The People’s Bank of China plans to temporarily waive a requirement for lenders to set aside reserves for some deposits, people with knowledge of the matter said. The measures are seen as another move to replace a universal reserve-requirement ratio cut that the central bank needs to boost credit and bolster the economy.
Crude advanced 0.4 percent to $55.67 a barrel in New York amid speculation that an escalating conflict in Libya will help ease a global supply surplus that’s driven oil into a bear market. At Libya’s largest oil port of Es Sider, capable of holding four times the country’s daily production, two out five storage tanks were still on fire today.
Palm oil futures (SPX) rose as high as 2,308 ringgit ($660) a metric ton in Kuala Lumpur, advancing for an eighth day. Malaysia, the second-largest producer, is experiencing its worst flooding in decades. Rubber climbed for a third day in Tokyo and traded near a four-month high. Prices for June delivery rose 0.6 percent to settle at 205.4 yen a kilogram.
