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Most European Stocks Advance as IMF Seeks Boost to Resources

European stocks  fell from a five-month high as the World Bank cut its global growth forecast, overshadowing reports that Greece is nearing a debt deal with private creditors. Photographer: Mannie Garcia/Bloomberg
European stocks fell from a five-month high as the World Bank cut its global growth forecast, overshadowing reports that Greece is nearing a debt deal with private creditors. Photographer: Mannie Garcia/Bloomberg

Jan. 18 (Bloomberg) -- Most European stocks rose as the International Monetary Fund said it plans to raise as much as $500 billion to expand its lending resources and Greece neared a debt deal with its private creditors.

Accor SA advanced 4.3 percent as the French hotelier said sales increased in 2011 and confirmed its profit forecast. Commerzbank AG declined 1.7 percent as Moody’s Investors Services lowered the financial-strength rating of Germany’s second-biggest lender.

The Stoxx Europe 600 Index gained less than 0.1 percent to 253.48 at the close of trading, extending a five-month high. More than three shares climbed for every two that dropped. The benchmark gauge has increased 3.7 percent so far this year.

“The rumors from the IMF about an increase in lending may have helped to spur markets,” said Chris Beauchamp, a market analyst at IG Index in London. “It is only a proposal, not a concrete decision.”

The IMF aims to increase its resources to safeguard the global economy after identifying a potential need for $1 trillion in financing in coming years, an IMF spokesman said in a statement. The IMF will not comment further until it has consulted its members, the fund said.

Greek Talks

Greece is close to a deal with private creditors that would give them cash and securities with a market value of about 32 cents per euro of government debt, according to Bruce Richards, who is on the creditors’ committee and chief executive officer for Marathon Asset Management LP.

National benchmark indexes climbed in 12 of the 18 western European markets. The U.K.’s FTSE 100 Index rose 0.2 percent, Germany’s DAX Index advanced 0.3 percent and France’s CAC 40 Index slipped 0.2 percent.

The World Bank cut its global growth forecast by the most in three years today, saying that a recession in the euro region threatens to exacerbate a slowdown in emerging markets such as India and Mexico.

The world economy will grow 2.5 percent this year, down from a June estimate of 3.6 percent, the Washington-based institution said. The euro area may contract 0.3 percent, compared with a previous estimate of a 1.8 percent gain. The World Bank cut its outlook for U.S. growth to 2.2 percent from 2.9 percent.

The German government trimmed its forecast for 2012 growth in Europe’s biggest economy to 0.7 percent from a previous 1 percent estimate.

German, Portuguese Sales

Germany sold two-year notes at a record-low yield today after euro-area ratings downgrades by Standard & Poor’s on Jan. 13. Portugal auctioned its targeted amount of 2.5 billion euros ($3.2 billion) of securities at a sale of three-, six- and 11-month treasury bills.

In the U.S., a report showed industrial production rose 0.4 percent in December. That still missed the median estimate for an increase of 0.5 percent in a Bloomberg survey of economists.

Accor SA advanced 4.3 percent to 21.97 euros. The French hotelier, which generated 73 percent of its sales from Europe in 2010, said revenue rose 2.5 percent in 2011 and reiterated its forecast for full-year earnings before interest and taxes.

Man Group Plc jumped 6.8 percent to 114.4 pence. The world’s largest publicly traded hedge fund said it will reduce pay and eliminate jobs in a plan to reduce costs by about 10 percent as market turmoil prompted clients to withdraw money.

Intermediate Capital

Intermediate Capital Group Plc, a debt provider for leveraged buyouts, soared 6.1 percent to 266 pence. Cinven Ltd., the British buyout firm that owns the Pizza Express restaurant chain, agreed to buy Intermediate Capital’s patents business CPA Global Ltd. for 950 million pounds ($1.5 billion).

Commerzbank fell 1.7 percent to 1.41 euros as Moody’s cut Commerzbank’s financial-strength rating to D+ from C-. The rating represents Moody’s opinion of a lender’s intrinsic safety and soundness and doesn’t address the probability of timely repayment of debt, according to the company’s definitions.

Tullow Oil Plc declined 4.2 percent to 1,394 pence, its biggest retreat since Nov. 9. The London-based oil explorer with the highest number of licenses in Africa dropped after delaying full production from its Jubilee field in Ghana by at least a year.

ThyssenKrupp AG slipped 1.6 percent to 19.98 euros. Reuters reported that Germany’s biggest steelmaker affirmed its first-quarter outlook and denied speculation it may cut its earnings forecast, citing a spokesman.

Veolia Environnement SA sank 5.5 percent to 8.14 euros and Suez Environnement SA dropped 2.6 percent to 9.14 euros. The utilities face a formal probe by European Union antitrust regulators into possible collusion to fix the price of water and waste water services in France.

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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