European stocks declined for a second day as a renewed Franco-German spat fuelled concern that euro-area leaders can't agree on how to tackle the debt crisis.
US index futures advanced while Asian shares fell.
The benchmark Stoxx Europe 600 Index dropped 0.4 per cent to 233.08 at 11.55am in London. The gauge has retreated 3.3 per cent this week as Italian and Spanish borrowing costs surged and Germany and France differed on the role of the European Central Bank in ending the crisis.
"The ECB remains the only institution that can credibly counter a collective loss of
confidence on such a scale," Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said in an e-mail. "Yet the longer its intervention in the bond markets of Italy and Spain remains limited and intermittent, the greater the risk that the crisis will escalate further."
Spanish and Italian bonds rose today after the ECB was said to buy the nation's securities in its fifth consecutive day of sovereign-debt purchases.
The MSCI Asia Pacific Index slipped 1.5 per cent as home prices in China fell in 33 of 70 cities monitored by the government in October, the worst performance since it expanded property curbs. Standard and Poor's 500 Index futures expiring in December added 0.7 per cent.
German chancellor Angela Merkel yesterday rejected French calls to deploy the ECB as a crisis backstop, defying global leaders and investors calling for more urgent action to halt the turmoil.
Dr Merkel listed using the ECB as lender of last resort alongside joint euro-area bonds and a "snappy debt cut" as proposals that won't work.
Europe is running out of options to fix its debt crisis and it is now up to Italy and Greece to convince markets they can deliver the necessary austerity measures, Finnish prime minister Jyrki Katainen said.
Greek prime minister Lucas Papademos won approval for the final 2012 budget designed to regain the confidence of creditors and secure resumption of international financing. The budget forecasts Greece's debt as a proportion of gross domestic product will fall to 145.5 per cent in 2012 from 161.7 per cent this year.
In Italy, Prime Minister Mario Monti faces a final confidence vote in his new government today after vowing to attack the euro-region's second-biggest debt and spur growth in its third-largest economy.
"Investors want to see action from politicians and a plan over how to solve the European debt problem, not just firefighting," said Lars Knudsen, who manages about $110 million at LGT Capital Management AG in Pfaeffikon, Switzerland. "It is as much a growth problem in Europe as a debt problem. Trading will continue to be influenced by news coming from politicians."
In the US, a report at 10am New York time may show that the index of leading economic indicators increased in October. The conference Board's gauge of the outlook for the next three to six months climbed 0.6 per cent after a 0.2 per cent gain in September, according to the median estimate of 56 economists in a Bloomberg News survey.
Bloomberg
