Europe, U.S. Stock Futures Rise; Cap Gemini, Atos May Gain

By Sarah Thompson

Oct. 9 (Bloomberg) -- European and U.S. stock futures rose after International Business Machines Corp. reaffirmed its profit forecast and investors speculated the worst three-day rout since 1987 was overdone. Asian shares also gained.

Cap Gemini SA, Europe's largest computer-services company, and Atos Origin SA may rise after IBM, the world's biggest computer services company, reported earnings that topped analysts' estimates. Nokian Renkaat Oyj might climb after Merrill Lynch & Co. recommended shares of the world's most profitable publicly traded tiremaker following declines from highs this year.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, increased 51, or 1.9 percent, to 2,735 at 7:35 a.m. in London. The U.K.'s FTSE 100 Index may gain 43 points, according to CMC Markets, a betting firm. Standard & Poor's 500 Index futures 1.7 percent.

Asian stocks gained after four of the region's central banks lowered interest rates to limit the economic impact of the worst financial crisis since the Great Depression. The cuts followed coordinated rate reductions yesterday by the Federal Reserve, European Central Bank, Bank of England, Bank of Canada and Sweden's Riksbank.

``Good news from IBM and a small rally in Asia will buoy Europe at the open,'' said Oliver Stevens, head of dealing at IG Markets in Melbourne. ``There's a little bit of bottom-fishing going on with share prices having come off so much.''

The yen fell against the dollar for the first time this month today, while Treasuries fell.

Valuations

The Stoxx 600 slumped 13 percent in three days, the biggest drop since October 1987. The sell-off left the index valued at 9.44 times the reported earnings of companies in the index yesterday, the cheapest since Bloomberg began compiling the data in January 2002. The MSCI World was valued at 12.01 times profit yesterday, the cheapest since at least 1995, while the S&P 500 traded for 18.82 times earnings.

ECB President Jean-Claude Trichet said late yesterday he can't rule out further rate cuts. ECB council member Erkki Liikanen said today the bank is seeing signs that inflation expectations are settling close to its 2 percent target.

Cap Gemini, Atos Origin, France's second-largest computer- services provider, and Logica, the Anglo-Dutch computer-services provider, might advance.

IBM said profit for the year will be at least $8.75 a share, reaffirming a previous forecast. Earnings last quarter increased to $2.05 a share, excluding some items, the company said. That topped the $2.01 average estimate of analysts in a Bloomberg survey.

Nokian Renkaat

Nokian Renkaat may gain. Shares of the tiremaker have dropped more than 60 percent from highs reached in May and June, Merrill analysts, including Thomas Besson, noted in a research note dated today.

``Some issues remain, in particular associated with a slowing Russian car market,'' the analysts wrote. ``These issues should largely be factored in Nokian's shares after their recent drop.''

Johnson Matthey Plc will probably move after the maker of a third of all autocatalysts to control vehicle pollution was raised to ``buy'' from ``neutral'' at UBS AG on its underlying financial strength.

Johnson Matthey has a ``solid balance sheet with little financial risk'' and is ``trading at historical trough multiples,'' London-based analysts Laurent Favre, Thomas Gilbert and Jim Varas wrote in a note dated today.

`Strong' Capital

Aviva Plc will probably climb after the U.K.'s biggest insurer said it has a ``strong'' capital position following the turmoil in global financial markets. The insurer has surplus capital to meet regulatory requirements of 1.9 billion pounds ($3.3 billion), the company said.

C&C Group Plc may slide. The Irish maker of Magners cider said first-half profit fell and Chief Executive Officer Maurice Pratt will resign after his strategy to reinvigorate sales didn't meet his own expectations.

Iceland's Financial Supervisory Authority will take control of Kaupthing Bank hf, the nation's biggest bank and the third lender to be seized by the government since the financial crisis escalated.

Kaupthing's domestic deposits are fully guaranteed, and the aim of the takeover is to provide a ``functioning domestic banking system,'' the FSA said in a statement on its Web site today.

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