European Stock Futures Rise as Italy’s Silvio Berlusconi Offers to Resign

By Adria Cimino - Nov 9, 2011 2:20 PM GMT+0700

European stock futures advanced after Italian Prime Minister Silvio Berlusconi offered to resign, boosting optimism that the region’s debt crisis won’t spread. Asian stocks climbed and U.S. index futures declined.

Futures on the Euro Stoxx 50 Index, a benchmark for the euro area, jumped 1.1 percent to 2,330 at 7:16 a.m. in London. Futures on the U.K.’s FTSE 100 Index expiring in December added 0.7 percent. Futures on the Standard & Poor’s 500 Index expiring the same month slipped 0.4 percent, while the MSCI Asia Pacific Index gained 1.1 percent.

“Investors are clearly encouraged by the fact there will now be change at the top and for the time being at least, this is bringing the bulls back into play,” Terry Pratt, an institutional trader at IG Markets, wrote.

The Stoxx Europe 600 Index has rallied 12 percent from this year’s low on Sept. 22 as investors speculated that the euro area would protect the economies of Italy and Spain from the sovereign-debt crisis.

Berlusconi last night said he will step down as soon as parliament passes austerity measures. He had pledged to cut spending in a bid to convince investors that Italy can manage the euro area’s second-largest debt. The government has yet to present the text of the measures.

Europe’s inability to contain its debt crisis pushed the yield on Italy’s benchmark 10-year bond to 6.77 percent yesterday, the highest since the euro’s introduction in 1999 and near the 7 percent level that drove Greece, Ireland and Portugal to seek international bailouts. Italy’s 1.9 trillion euro-debt ($2.6 trillion) is bigger than that of Greece, Spain, Portugal and Ireland combined.

To contact the editor responsible for this story: Will Hadfield at whadfield@bloomberg.net