European Stock Futures Advance; Nestle, Sanofi, TNT May Climb

By Adria Cimino

Aug. 11 (Bloomberg) -- European stock-index futures advanced, following gains in the U.S. and Asia, as a stronger dollar boosted profit outlooks for companies that derive more than a quarter of their revenue from America.

Nestle SA, the world's largest food company, and French drugmaker Sanofi-Aventis SA may climb after their U.S.-traded securities advanced. TNT NV will probably rally after the Sunday Telegraph said United Parcel Service Inc. held initial talks to buy Europe's second-biggest express-delivery service.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, added 18, or 0.5 percent, to 3,433 at 7:33 a.m. in London. The U.K.'s FTSE 100 Index may increase 22, according to Cantor Index, a betting firm.

U.S. stocks rose on Aug. 8, sending the Standard & Poor's 500 Index to the largest weekly rally since April, as retailers, automakers and restaurants climbed on speculation earnings will improve as oil retreats. Banks and carmakers led Asian shares higher today.

``Expectations are for the major European indices to start the week in positive territory after Friday's bumper gains on Wall Street with cheaper crude and a strengthening dollar both likely to be key elements in sustaining the rally,'' Paul Webb, chief dealer at CMC Markets in London, wrote.

In China, the benchmark stock index fell today to the lowest in 17 months as producer prices rose and Goldman Sachs Group Inc. said the Olympic Games will slow the economy.

Europe's Stoxx 600 last week reached its highest level since June 30 as oil fell and earnings from Societe Generale SA and Royal Bank of Scotland Group Plc eased concern banks need to raise more capital. The measure has increased 8.5 percent from an almost three-year low on July 15.

Nestle

American depositary receipts of Nestle climbed 0.8 percent from the share's close in Switzerland. The world's largest food company makes 31 percent of its sales in the Americas. ADRs of Sanofi rose 0.8 percent from the stock's close in Paris. France's biggest drugmaker generates 34 percent of its revenue in the U.S.

The euro fell to a five-month low against the dollar as fighting between Russia and Georgia spread to a second front, raising concern about stability in Europe.

The euro slid to $1.4907 per dollar, the lowest since Feb. 26, before trading at $1.4986, from $1.5005 late Aug. 8 in New York.

TNT, Nobel Biocare

TNT may rise after Britain's Sunday Telegraph said UPS held initial talks to buy the company for 10 billion euros ($15 billion). UPS made an informal approach to buy TNT and the companies have held preliminary talks, the newspaper said, citing unidentified people. Spokesmen for both companies declined to comment.

Nobel Biocare Holding AG, the world's largest maker of dental implants, said first-half profit dropped 33 percent to 57.2 million euros because of a weak U.S. dollar and lower demand in Europe. Nobel Biocare generates about 34 percent of its sales in North America.

ING Groep NV, the biggest Dutch financial-services company, had its recommendation cut to ``hold'' from ``buy'' at Citigroup Inc.

Marks & Spencer Group Plc, the U.K.'s largest clothing retailer, was downgraded to ``neutral'' from ``overweight'' at HSBC Holdings Plc.

Royal Bank of Scotland Group Plc is selling up to $8 billion worth of leveraged-buyout financing to private-equity groups Apollo Management LP, GSO Capital Partners LP and TPG Inc., the Financial Times reported, citing unidentified people familiar with the deal.

RBS did not reply to calls for comment, the FT said.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.