European stocks erase declines

Tue, Oct 2, 2012, 01:00

European stocks erased their decline as retailers climbed, while companies from Alstom to Erste Group Bank dropped after selling shares.

US index futures gained and Asian shares were little changed.

Delhaize Group climbed 2.3 per cent, leading a gauge of retailers higher. Alstom plunged 5.5 per cent after the company sold €350 million of shares in a private placement.

Erste Group slipped 2.2 per cent after the lender's largest shareholder sold a 235 million-euro stake.

The Stoxx Europe 600 Index added 0.2 per cent to 272.8 at 9.52 am in London, erasing an earlier retreat of as much as 0.7 per cent.

The equity benchmark rallied 1.4 per cent yesterday. Standard and Poor's 500 Index futures expiring in December rose 0.5 per cent today, after the benchmark measure pared its advance in late afternoon trading yesterday.

The MSCI Asia Pacific Index gained 0.1 per cent today.

The Stoxx 600 yesterday rebounded from last week's selloff after stress tests bolstered confidence in the Spanish banking system and a report showed US manufacturing unexpectedly expanded last month.

The gauge fell 2.7 per cent last week amid concern the US Federal Reserve's bond buying program will fail to encourage growth. Fed Chairman Ben Bernanke defended the latest round of the central bank's asset-purchase program late yesterday in his first comments since renewing the purchases last month.

He said the program will stimulate growth, cut unemployment, help savers and support the dollar.

He said the Fed will maintain record stimulus even after the expansion gains strength. He added that policy makers don't expect the economy to remain weak through 2015.

Elsewhere, the Reserve Bank of Australia cut its benchmark- interest rate to the lowest level since 2009 to revive demand outside the mining industry.

Governor Glenn Stevens and his board lowered their overnight cash-rate target by a quarter of a percentage point to 3.25 per cent.

Bloomberg