Global Stocks, U.S. Index Futures Climb on Rate Cuts, Earnings

By Adam Haigh

Oct. 30 (Bloomberg) -- Stocks rallied around the world and U.S. index futures climbed after central banks from Hong Kong to Washington cut interest rates and the Federal Reserve provided $120 billion to South Korea, Singapore, Brazil and Mexico.

BHP Billiton Ltd. and Rio Tinto Group climbed more than 7 percent after copper and zinc surged by the limit in Shanghai. Alcatel-Lucent SA jumped 16 percent and Metro AG gained 11 percent on better-than-expected earnings. South Korea's Kospi index climbed a record 12 percent and the won rose the most in a decade after the Fed provided $30 billion in a currency swap. Money-market rates declined in Asia.

``It's looking pretty rosy, largely driven by commodities,'' said Tom Hougaard, chief market strategist at City Index, a spread-betting firm in London. ``It looks like this rally has got some legs to run on, rather than just being a dead-cat bounce,'' he told Bloomberg Television.

The MSCI World Index added 2.3 percent to 945.3 at 8:05 a.m. in London, advancing for a third day, the longest winning streak in two months. The index is still down 41 percent in 2008, headed for the worst year since records began in 1970.

Europe's Dow Jones Stoxx 600 Index advanced 0.9 percent as 15 of the 19 industry groups gained. Futures on the Standard & Poor's 500 Index rose 2.7 percent.

The MSCI Asia Pacific Index rose 8.8 percent as central banks in Taiwan and Hong Kong followed China in lowering borrowing costs in an attempt to curb an economic slowdown. Hong Kong's Hang Seng Index surged 10 percent, and Taiwan's Taiex Index gained 6.3 percent.

Hong Kong's three-month interbank offered rate, or Hibor, dropped 15 basis points to 3.39 percent, at the 11 a.m. fixing by the Hong Kong Association of Banks.

Ready to Cut

Fed Chairman Ben S. Bernanke signaled he's ready to keep cutting rates should yesterday's half point reduction in the main rate to 1 percent fail to stem the deepening economic slump. The Fed said it agreed to provide $30 billion to ``four large systemically important economies.''

The MSCI Emerging Markets Index advanced for a third day, climbing 6.7 percent. Russia's Micex index gained 7.7 percent, and Turkey's ISE National 100 Index jumped 8 percent.

BHP Billiton, the world's biggest mining company, advanced 7.7 percent to 1,034 pence. Rio Tinto Group, the third largest, gained 7.6 percent to 2,879 pence.

Copper Climbs

Copper for January delivery on the Shanghai Futures Exchange gained by 1,270 yuan, or 4 percent, from the previous settlement price, to 33,100 yuan ($4,842) a metric ton when the exchange opened for trading.

London Metal Exchange copper climbed 2.6 to $4,770 a ton, following a yesterday's 13 percent rally.

Royal Dutch Shell Plc gained 1.9 percent to 1,737 pence. Europe's biggest oil company said third-quarter profit climbed 22 percent as record crude oil prices offset production cuts in Nigeria and the Gulf of Mexico.

More than $12 trillion was erased from the market value of equities worldwide as of Oct. 27, accounting for about one-third of the total value wiped off stocks this year, as $687 billion of writedowns and losses by banks triggered a freeze in credit markets.

Alcatel-Lucent advanced 16 percent to 1.95 euros. The world's largest supplier of fixed-line phone networks reported a third-quarter net loss of 40 million euros ($52.7 million), narrower than the 73 million loss forecast by analysts surveyed by Bloomberg.

Metro, Germany's largest retailer, rallied 11 percent to 24.50 euros after saying revenue growth slowed in the third quarter as a weakening domestic economy curbed consumers' willingness to spend.

Deutsche Bank, Unilever

Deutsche Bank AG climbed 6.4 percent to 26.38 euros. Germany's biggest bank reported a surprise third-quarter profit following new accounting rules that allowed it to book fewer asset writedowns. The shares rose as much as 8 percent to 26.79 euros at Lang & Schwarz Wertpapierhandelsbank AG in Dusseldorf.

Unilever gained 2.4 percent to 19.345 euros after the world's second-largest consumer-products company reported net income of 1.64 billion euros, beating the 1.49 billion-euro median estimate in a survey of seven analysts.

Pernod Ricard SA, the world's second-largest liquor company, climbed 6.3 percent to 50.50 euros after first-quarter sales rose 13 percent and confirmed its full-year guidance.

Reports today may show the U.S. economy shrank in the third quarter by the most since the recession in 2001.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net