European Stock-Index Futures Climb; Air France, HSBC May Rally

By Sarah Jones

July 23 (Bloomberg) -- European stock-index futures rose, after a drop in crude oil stoked a rally in U.S. equities and pushed Asian shares higher. Air France-KLM Group and British Airways Plc may advance.

UBS AG and HSBC Holdings Plc may lead banks higher after Deutsche Bank AG said financial companies are overcoming credit losses. STMicroelectronics NV may rise after Europe's largest chipmaker forecast sales that met analysts' estimates. Merck KGaA might be active after the drugmaker said second-quarter profit more than doubled. PSA Peugeot Citroen may gain on better-than-estimated earnings.

Futures on the Dow Jones Euro Stoxx 50, a benchmark for the euro region, gained 30, or 0.9 percent, to 3,380 at 7:32 a.m. in London. The U.K.'s FTSE 100 Index is set to open up 45 points, according to CMC Markets.

``U.S. indexes pushed back into positive territory helped along by a sharp fall in the price of oil,'' said Paul Webb, chief dealer at CMC Markets in London. ``This shift in sentiment looks set to roll into'' Europe.

The Dow Jones Industrial Average climbed 127 points in the last hour of trade yesterday. Asian stocks rose the most in three months today as Macquarie Group Ltd., Australia's biggest securities firm, said it made a ``solid'' start to the year.

Crude fell for a second day as forecasters expect Hurricane Dolly to miss fields in the Gulf of Mexico and the dollar rebounded, curbing investments in commodities.

The contract for September delivery fell as much as 0.7 percent to $127.58 a barrel on the New York Mercantile Exchange. The oil price yesterday tumbled 2.6 percent.

Air France, British Airways

American depositary receipts of Air France, Europe's biggest airline, climbed 0.9 percent from the close in Paris. ADRs of British Airways, the region's third-largest airline, jumped 1.5 percent from the London finish.

U.S. banks rallied yesterday after Deutsche Bank analyst Mike Mayo said bank losses haven't spread as ``much as feared'' and he is less ``negative'' on their earnings.

UBS, the world's largest wealth manager, and HSBC, Europe's biggest bank by assets, may rise.

Financial firms have led a rout that has erased about $13 trillion in value from global equities since October as credit losses and asset writedowns sparked by the subprime-mortgage market's collapse topped $467 billion worldwide.

Shares of STMicroelectronics might advance after the chipmaker forecast third-quarter revenue that met analysts' estimates, bolstered by sales of chips used in mobile devices.

Sales will climb between 7 percent and 14 percent from a year earlier. The midpoint of that range equates to $2.45 billion, the average of analysts' estimates in a Bloomberg survey.

Merck, Peugeot

Merck may be active after the German maker of the Erbitux cancer drug said second-quarter profit more than doubled to 207.4 million euros ($327.4 million), as doctors prescribed more of tumor treatment and the Rebif multiple sclerosis medicine. That compares to the 209.3 million median estimate of seven analysts surveyed by Bloomberg. Sales increased to 1.9 billion euros.

Peugeot, Europe's second-biggest carmaker, said first-half profit rose 49 percent to 733 million euros, aided by cuts in production costs and buoyant demand for its new 308 compact and 207 small car. Analysts had expected net income of 674 million euros, based on the median of nine estimates in a Bloomberg survey.

BHP Billiton Ltd. might be active after the world's biggest mining company said fourth-quarter iron ore output rose 15 percent to 29.7 million metric tons. The company said production may rise 23 percent to 137 million tons this year and that it may have uncovered a new copper despot in Northern Chile.

Vodafone Group Plc may gain after the world's largest mobile-phone company said it will start a 1 billion-pound ($2 billion) stock buyback because the shares are ``significantly'' undervalued after a 14 percent drop yesterday.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.