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. Asian shares advanced while U.S. index futures were little changed.
The Stoxx Europe 600 Index dropped 0.5 percent to 251.96 at 8:19 a.m. in London. The MSCI Asia Pacific Index climbed 0.3 percent and futures on the Standard & Poor’s 500 Index expiring in March slipped less than 0.1 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.
“Even achieving these much weaker outturns is very uncertain,” the World Bank said.
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 U.S. growth outlook was cut to 2.2 percent from 2.9 percent.
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.
Portugal Debt Sale
Portugal will test the markets’ appetite for debt today when the country auctions the longest maturity bills since it sought rescue funds last year from the European Union and International Monetary Fund.
Investors will be asked to bid for 11-month Portuguese bills as 10-year yields hover at record highs. The rise in rates followed the Jan. 13 decision by S&P to cut Portugal’s credit rating to non-investment grade, or junk, meaning the debt can no longer be held by some index-tracking funds.
In the U.S., a report may show industrial production rebounded in December after falling for the first time in seven months in November, according to a Bloomberg survey of economists.
Tullow Oil Plc (TLW) dropped 6 percent to 1,368 pence after delaying the ramp up of Ghana’s Jubilee field to plateau production.
