European Stocks Rise as Greece Backs Down From Writedown Request

Photographer: Kostas Tsironis/Bloomberg

European stocks climbed as concern that Greece would defy its creditors eased after the nation retreated from a plan to ask the euro area to write down debt.

The Stoxx Europe 600 Index rose 0.8 percent to 370.28 at the close of trading. The gauge pared gains of as much as 1.3 percent after a person familiar with the matter said Germany expects talks with Greece to drag on until the current round of aid runs out.

Greek stocks surged 11 percent, posting the best two-day gain in 24 years. Finance Minister Yanis Varoufakis proposed late on Monday to exchange Greece’s existing debt for new bonds linked to economic growth, according to a person who attended a meeting. Spain’s IBEX 35 Index and Italy’s FTSE MIB Index added at least 2.6 percent, rebounding from two-day drops.

“It’s good news that there is no haircut,” said Tristan Abet, a Paris-based strategist at Louis Capital Markets LP, referring to Greece’s debt. “We’re seeing the normalization. It’s quite smart to link the bonds to economic growth. That’s a nice element.”

National Bank of Greece SA and Eurobank Ergasias SA rallied at least 18 percent, pushing a gauge of Greek lenders higher. The benchmark ASE Index slid 13 percent last month, with banks tumbling to record lows, after anti-austerity party Syriza formed a new coalition government.

Commodity Stocks

Miners and oil-and-gas shares were the best performers in the Stoxx 600, after posting the worst drop among 19 industry groups in the gauge in the last six months.

A gauge of energy stocks rose to a two-month high as oil rose for a fourth day, with Total SA and Royal Dutch Shell Plc climbing more than 2.7 percent. BP Plc rallied 2.8 percent after reporting quarterly profit of $2.2 billion, beating analysts’ predictions. BHP Billiton Ltd. and Antofagasta Plc advanced at least 5 percent.

“Investors are preferring to play the previous laggards -- the commodity-related stocks,” Abet said.

Among shares moving on corporate news, Banco Santander SA gained 4.6 percent. Spain’s largest lender said profit jumped 68 percent in the fourth quarter, in line with the average analyst estimate.

German power producers RWE AG and EON SE tumbled more than 3.9 percent. The Advocate General of the European Court of Justice said Germany’s nuclear-fuel tax is in line with the region’s law. Santander said before the decision that a ruling favorable to the companies could have boosted their recurrent net income by about 20 percent.

Aberdeen Asset Management Plc dropped 3.4 percent after the money manager said clients withdrew money in the three months through December amid a downturn in Asia.

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