ITS BACK TO GREECE AND FED RATES AS EUROPEAN STOCK ADVANCE

European investors turned their focus back to Greece and the Federal Reserve’s interest-rate increase, with the region’s shares rising as concern eased that China’s currency devaluation would hurt exporters.

The Stoxx Europe 600 Index rose 0.3 percent to 387.26 at 11:30 a.m. in London. Greece’s ASE Index climbed 0.4 percent after German Chancellor Angela Merkel said she’s confident the International Monetary Fund will join the nation’s third bailout program and signaled willingness to consider debt relief to help make it happen. Portugal’s PSI 20 Index rallied 0.9 percent, the most among western-European markets.

“An agreement on Greek debt this week bodes well for stocks, while the yuan devaluation and the strength of the dollar has taken the heavy lifting off the Fed,” said Patrick Spencer, equities vice chairman at Robert W. Baird & Co. in London. “Investors are going to look at Wednesday minutes of the most recent Fed meeting to see how they’re going to react to the recent yuan devaluation and further decline in oil prices.”

The Stoxx 600 pared an advance of as much as 1.1 percent as miners slipped, with commodities extending their lowest level since 2002. The volume of Stoxx 600 shares changing hands was 40 percent lower than the 30-day average.

The Fed is less likely to raise interest rates soon as the Chinese currency weakens, according to a JPMorgan Chase & Co.

Not That Way

“Many interpret last week’s CNY depreciation very negatively, as either the exporting of deflation, the start of a currency war or a recognition that Chinese growth is much worse than thought,” JPMorgan equity strategist Mislav Matejka wrote in a report on Monday. “We don’t see it that way.”

Automakers in the Stoxx 600 were among industry groups climbing the most, after posting their worst weekly slump since 2013. BMW AG added 1.5 percent as Barclays Plc raised its rating on the stock to the equivalent of a buy.

Amid companies moving on corporate news, Alstom SA jumped 6.9 percent after a report that the European Union will probably approve General Electric Co.’s asset acquisition. Hennes & Mauritz AB added 1.1 percent as July sales beat estimates. Credit Agricole SA advanced 2.4 percent as HSBC Holdings Plc recommended buying the stock.

The Stoxx 600 lost 2.7 percent last week, with German and French benchmark gauges among those that dropped the most. On Friday, after three days of moves exceeding 1 percent, some calm returned to equities, and the Stoxx 600 ended little changed.

source:Bloomberg