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By Bloomberg

European stocks climbed for a second day, amid optimism monetary policies by the European Central Bank and Federal Reserve will support the economy.

The Stoxx Europe 600 Index advanced 1.1 percent to 336.84 at 8:05 a.m. in London. The equity benchmark rose 0.5 percent yesterday amid speculation inflation data that fell below zero for the first time in five years bolsters the case for the ECB to begin quantitative easing. Futures on the Euro Stoxx 50 Index rallied late yesterday as German lawmakers said the nation is open to discussing debt relief with Greece’s next government.

“Traders sense dovishness from central banks,” Jonathan Sudaria, a trader at London Capital Group Holdings Plc in London, wrote in a note. “Yesterday’s dip into deflation for Europe has set alight expectations that the ECB will have to pull out the big guns. Cautious FOMC minutes overnight that extolled patience over the first rate hike has given traders some respite until at least April.”

The Standard & Poor’s 500 Index yesterday rose the most in three weeks as minutes from the Federal Open Market Committee’s last policy meeting showed most officials agreed their new policy guidance means they are unlikely to raise interest rates before late April. Some also expressed concern inflation could remain too low. S&P 500 futures climbed 0.6 percent today.

The Stoxx 600 is still down 4.1 percent from an almost seven-year high reached last month, as energy shares slumped and concern grew over Greece as Prime Minister Antonis Samaras said this month’s election could lead to the nation exiting the euro area. The ASE Index fell 1.5 percent yesterday, extending its lowest close since 2012.

German Backing

German Chancellor Angela Merkel yesterday backed keeping Greece in the euro area. The German government has consistently sought to avoid the most-indebted nation’s exit from the currency bloc, she said late yesterday in London.

Among stocks moving on corporate news today, Standard Chartered Plc gained 1.7 percent after saying it is closing its institutional equities business and eliminating about 200 jobs, ahead of plans to cut 2,000 more staff. The lender plans to save $400 million in costs this year.

Tesco Plc climbed 5.2 percent after Chief Executive Officer Dave Lewis set out a plan for reviving the struggling U.K. grocer that includes closing dozens of stores, halting dividend payments and disposing of assets worth billions of pounds. It also posted Christmas sales that beat estimates and said it’s cutting prices on hundreds of branded products.

Marks & Spencer Group Plc dropped 3 percent after saying same-store sales at a division that includes its apparel business dropped 5.8 percent in the third quarter, missing analysts’ estimates.