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Premarket: Shrugging off Italy, Greece Add to ...

European stocks clawed higher after initial losses inflicted by Standard & Poor's decision to cut Italy's credit rating.

Britain's FTSE 100 rose 1.2 per cent, France's CAC 40 1.4 per cent and Germany's DAX 2 per cent.

U.S. stock futures reflected optimism as well. Dow futures were 82 points, or 0.7 per cent, higher at 11,405 and S&P 500 futures were up 8.6 points, or 0.7 per cent, at 1,206.40 about two hours before trading began on Wall Street.

Investors remained hopeful that Greece would make headway in procuring $8-billion (U.S.) to avoid a sovereign debt default. Greek Finance Minister Evangelos Venizelos is to hold a teleconference later on Tuesday with officials from the European Commission, International Monetary Fund and European Central Bank to persuade them that Athens will meet strict budget targets in return for the bailout money.

The euro rose 0.7 per cent at $1.3708 (U.S.). The dollar was 0.3 per cent lower at 76.44 yen.

Japan's Nikkei closed 1.6 per cent lower, while Hong Kong's Hang Seng rose 0.5 per cent.

Japanese Finance Minister Jun Azumi said on Tuesday that the recent sharp rise of the yen has slowed the pace of the country's economic recovery from the March earthquake and tsunami.

The yield on Italian bonds rose 7 basis points to 5.66 per cent. Italy criticized Standard & Poor's for its credit rating downgrade, saying the decision was out of touch with reality and promised that austerity measures would soon bear fruit. Italy's rating is now A/A-1, five notches above junk.

Copper gained 0.7 per cent to $3.80, after tumbling nearly 4 per cent on Monday.

Gold rose $9.30 to $1,788.20 an ounce.

Oil traded higher at $86.65 a barrel on the NYMEX.

The Canadian dollar edged lower to $1.0089 (U.S.).

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