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European Stock Futures Rally as EU Vows to Help Greece; Banks May Advance

--should help Silver prices in the short term--
By Sarah Jones - Jun 23, 2011 11:28 PM PT

European stock futures rallied, indicating the Stoxx Europe 600 Index will rebound from a three- month low, after European Union leaders vowed to support Greece. U.S. futures and Asian shares advanced.

Banco Bilbao Vizcaya Argentaria SA (BBVA) and UniCredit SpA (UCG) may lead gains in banks after yesterday’s biggest drop since February. Vedanta Resources Plc (VED) and Repsol YPF SA (REP) may move as a gauge of commodities climbed from a four-month low. Technology shares might be active after Oracle Corp. reported a decline in hardware sales.

Futures on the Euro Stoxx 50 Index expiring in September rallied 1.5 percent to 2,772 at 7:27 a.m. in London, while contracts on the FTSE 100 Index jumped 1.3 percent. Standard & Poor’s 500 Index futures climbed 0.5 percent after the U.S. gauge pared a drop of as much as 1.9 percent in late trading yesterday. The MSCI Asia Pacific Index gained 1.1 percent.

“European equity markets are set to open higher as talks at the EU summit show signs the Greek debt crisis may ease,” said Jonathan Sudaria, a trader at London Capital Group. “U.S. markets rallied on the news and European markets are expected to follow on the open, but optimism may be short lived.”

European stocks yesterday sank to a three-month low after U.S. Federal Reserve Chairman Ben S. Bernanke cut his growth forecast for the world’s largest economy. Since reaching this year’s peak on Feb. 17, the benchmark Stoxx 600 has tumbled 9.2 percent amid U.S. economic data that trailed forecasts and mounting concern Greece may default on its debt.
Greek Cuts

EU officials vowed at a two-day summit in Brussels yesterday to stave off a default in Greece as long as the country’s Prime Minister George Papandreou pushes through a package of budget cuts next week. Greek lawmakers are due to vote on 78 billion euros ($111 billion) of austerity measures on June 30.

“This is not only a green light but also a positive sign for the future of Greece,” Papandreou told reporters after the first session of yesterday’s summit late yesterday.

In the U.S., a report today might show orders for durable goods climbed 1.5 percent in May after slumping the prior month, according to the median of 69 economists’ estimates in a Bloomberg News survey. Another release may confirm that the U.S. economy cooled in the first quarter.

BBVA, Spain’s second-biggest bank, and UniCredit, Italy’s largest, may lead a rebound in banks after a gauge of lenders yesterday sank 2.7 percent, the biggest drop since Feb. 21.
Vedanta, Repsol

Vedanta, which was yesterday downgraded to “underperform” at BofA Merrill Lynch Global Research, and Repsol, Spain’s biggest oil company, may be active today after the shares lost at least 2 percent yesterday.

Commodities rebounded today, led by gains in crude oil and copper, as investors maintained their bullish outlook for demand. The S&P GSCI Index of 24 commodities rallied as much as 1.1 percent, paring yesterday’s 3.6 percent slump.

Premier Wen Jiabao said in an opinion piece in the Financial Times that China’s efforts to stem inflation have worked and that the pace of consumer-price increases will slow.

Technology shares might be active after Oracle reported a 6 percent drop in hardware sales to $1.16 billion. The company had forecast an increase of 6 percent to 12 percent in March. Oracle, which acquired Sun Microsystems Inc. last year, tumbled 4.4 percent in extended New York trading yesterday.

Separately, Micron Technology Inc., the largest U.S. maker of computer-memory chips, declined 12 percent in late New York trading after third-quarter sales and profit fell short of analysts’ estimates.

Cap Gemini SA (CAP), Europe’s largest computer-services company, may move after Accenture Plc, the world’s second-largest technology-consulting company, raised its full-year revenue and earnings forecasts on a surge of new bookings.

To contact the reporter on this story: Sarah Jones in London at [e-mail]

To contact the editor responsible for this story: Andrew Rummer at [e-mail]