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Premarket: IMF riding to the rescue?

Signs that the International Monetary Fund is taking the European debt crisis seriously supported stocks and the euro, as Greece prepared to hammer out a plan to avert bankruptcy with its creditors.

Britain's FTSE 100 gained 0.2 per cent, France's CAC 40 rose 0.3 per cent, and Germany's DAX gained 0.6 per cent. Japan's Nikkei rose 1 per cent, while Hong Kong's Hang Seng rose 0.3 per cent.

U.S. stock futures pointed north as well. Dow futures were up 32 points, or 0.3 per cent, at 12,452 about two hours before the market opened. S&P 500 futures inched 4 points, or 0.3 per cent higher to 1,293.30.

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The IMF plans to boost its lending resources by $1-trillion (U.S.), according to various media reports. Managing director Christine Lagarde said that the institution was looking at ways to increase its financial firepower, partly to deal with Europe's debt crisis.

Bloomberg News cited an unidentified G20 official as saying the IMF is pushing China, Brazil, Russia, India, Japan and oil-exporting nations to be the top contributors. The fund wants the agreement struck at the Feb. 25-26 meeting of G20 finance ministers and central bankers in Mexico City, the official said.

Amid the speculation, the euro rose to $1.2845. It was also helped by a bond auction in which Portugal easily raised $3.2-billion, just days after Standard & Poor's downgraded its credit rating to junk.

International creditors and the Greek government are meeting later on Wednesday to resume talks that derailed last week over the interest rate Greece will offer on new bonds and the losses that private investors must absorb. Unless a deal is struck, Greece is likely to default in late March, when 14.5-billion euros of bond redemptions take place.

Gold gained $1.10 an ounce at $1,656.70.

U.S. crude oil rose 27 cents $100.98 a barrel.

Copper prices rose 0.6 percent to $8,250 a tonne.

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The Canadian dollar traded at 98.62 U.S. cents.

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About the Author
Deputy head of Audience

Sonali Verma is deputy head of audience at the Globe and Mail. She is a business journalist with more than 20 years of experience, mainly in digital media.She was previously the Globe and Mail’s senior editor in charge of audience engagement, overseeing its homepages as well as social media operations. More

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