European Stock-Index Futures Rise as Oil Drops; LVMH May Rally

By Michael Patterson

July 30 (Bloomberg) -- European stock-index futures rose as oil's decline to a 12-week low boosted the profit outlook for airlines and earnings at Siemens AG and LVMH Moet Hennessy Louis Vuitton SA beat analysts' estimates.

Air France-KLM Group may climb as crude prices fell on speculation gasoline demand may slow. Siemens, Europe's largest engineering company, might advance after orders for power plants and generator upgrades increased profit. LVMH, the biggest luxury-goods maker, may gain on a 25 percent jump in Asian sales.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, added 36, or 1.1 percent, to 3,380 at 7:37 a.m. in London. The U.K.'s FTSE 100 Index may climb 58 points, according to BGC Partners, a betting firm.

Oil ``has been a very key driver certainly for day-to-day moves in the market,'' said Jane Coffey, head of equities at Royal London Asset Management, which oversees about $63 billion. A drop in energy costs ``will allow central banks to start thinking about interest-rate cuts,'' she said.

U.S. stocks rallied yesterday, sending the Standard & Poor's 500 Index to a 2.3 percent gain, after Merrill Lynch & Co. secured new capital and U.S. Steel Corp. surged the most in seven years on better-than-projected earnings. Asian stocks rose the most in a week today as Standard & Poor's signaled Australia's banks will contain credit losses.

More than $11 trillion has been erased from global equities in 2008 as almost $474 billion in credit-related losses and accelerating inflation damp the outlook for economic and profit growth.

Earnings Estimates

Earnings at companies in the Stoxx 600 will likely fall 2.6 percent on average this year, according to analysts' estimates compiled by Bloomberg. That's down from a forecast for 11 percent profit growth at the start of this year.

All of the 23 developed nations in the MSCI World Index except for Canada have experienced bear-market plunges of 20 percent or more since September as credit losses surged and record commodity prices stoked inflation.

Air France, Europe's biggest airline, may climb after crude oil for September delivery declined 21 cents to $121.98 a barrel in New York.

Siemens might advance as net income through June 30 was 1.37 billion euros ($2.1 billion), topping the 967 million-euro profit predicted by analysts.

LVMH may gain after first-half net income climbed 7 percent to 891 million euros. That surpassed the 857 million-euro median estimate of nine analysts surveyed by Bloomberg.

ArcelorMittal, EADS

ArcelorMittal, the world's biggest steelmaker, may be active after saying second-quarter profit more than doubled on increased prices and rising demand.

ThyssenKrupp AG will probably rise after Merrill Lynch & Co. upgraded the shares to ``buy'' from ``neutral,'' saying Germany's largest steelmaker may increase its full-year earnings forecast.

Cadbury Plc may advance. The world's largest confectioner reported a first-half profit from continuing operations excluding one-time charges that topped analysts' estimates.

European Aeronautic, Defence & Space Co. might move. Europe's largest aerospace manufacturer posted second-quarter profit of 118 million euros. Analysts had predicted profit of 388 million euros, according to the median estimates of eight people surveyed by Bloomberg.

Next Plc may rally after the U.K.'s second-biggest clothes retailer said a sales drop eased in the second quarter as mild weather spurred demand for summer fashions and remodeled stores drew shoppers.

Postbank, Bayer

Deutsche Postbank AG might move as Germany's largest consumer bank by clients posted second-quarter earnings that met the median estimate of 11 analysts surveyed by Bloomberg News.

Bayer AG will probably be active after the biggest drugmaker in Germany raised its full-year sales forecast, saying it expects revenue to gain more than 5 percent.

Saab AB, builder of the Gripen fighter plane, might advance. Royal Bank of Scotland Group Plc raised its recommendation on the shares to ``buy'' from ``hold.''

The company ``continues to prosper and now has good opportunities to secure export contracts for the Gripen,'' RBS wrote in a research note.

To contact the reporter on this story: Michael Patterson in London at mpatterson10@bloomberg.net.