Global Stocks, U.S. Index Futures Rise; Air France, BP Advance

By Adria Cimino

Oct. 28 (Bloomberg) -- Stocks in Europe and Asia rose as BP Plc's earnings topped analysts' estimates and the MSCI World Index traded near the cheapest since at least 1995. U.S. index futures climbed.

BP rallied 7.3 percent after Europe's second-biggest oil company said profit rose 83 percent in the third quarter. Air France-KLM Group, Europe's biggest airline, and Ryanair Holdings Plc, the region's largest discount carrier, gained more than 3 percent after Citigroup Inc. recommended the stocks.

BP ``is giving a bit of cheer to the market and is allowing investors to look at the fundamentals,'' said Vincent Juvyns, a strategist at ING Investment Management in Brussels, which oversees $537 billion. Valuations are ``interesting,'' he said.

The MSCI World Index added 1.4 percent to 846.06 at 8:05 a.m. in London, snapping a two-day, 8.4 percent drop. Europe's Dow Jones Stoxx 600 Index advanced 2.8 percent, while the MSCI Asia Pacific Index added 3.1 percent, erasing earlier losses of 2.8 percent. Standard & Poor's 500 Index futures rallied 5 percent.

More than $12 trillion was erased from the market value of equities this month, accounting for about one-third of the total value wiped off stocks this year, as almost $680 billion of writedowns and losses by banks triggered a freeze in credit markets.

The MSCI World Index has fallen 29 percent this month. The index of companies from 23 developed countries is trading at 10.5 times earnings of the companies in the index, near its lowest since at least 1995 when Bloomberg started following the data.

Worst Since 1987

The Stoxx 600 is down 22 percent in October, headed for the worst month since October 1987. The pan-European index closed yesterday valued at 7.9 times profit, the lowest since at least January 2002. The S&P 500 for U.S. equities trades at 18.9 times profit.

BP climbed 7.3 percent to 469.75 pence. Profit rose 83 percent to $8.05 billion in the third quarter as record crude and higher natural-gas prices outweighed production setbacks in Azerbaijan and the Gulf of Mexico.

Excluding one-time items and gains or losses from inventories, profit was expected to climb 62 percent to $6.82 billion, according to the median estimate of 10 analysts surveyed by Bloomberg News.

Air France, Europe's largest airline, jumped 4.7 percent to 10.89 euros, and Ryanair, the region's biggest discount carrier, added 6.8 percent to 2.66 euros. The stocks were raised to ``buy'' from ``hold'' at Citigroup, which cited ``record low'' valuations.

British Sky Broadcasting Group Plc gained 2.9 percent to 262.25 pence. The U.K.'s biggest pay-television provider was upgraded to ``buy'' from ``hold'' at Citigroup.

ARM, Aviva

ARM Holdings Inc. gained 9.3 percent to 88 pence after the U.K. designer of semiconductors used in Apple Inc.'s iPhone said third-quarter profit jumped 38 percent on record sales.

Aviva Plc climbed 11 percent to 271 pence. The U.K.'s biggest insurer by assets said its capital reserves are ``strong,'' as it reported a 12 percent increase in life and pension sales in the first nine months of the year, helped by gains in the U.S.

SAP AG fell 1 percent to 24.32 euros. The world's biggest maker of business-management software withdrew its 2008 sales forecast and lowered its profit-margin target, citing the economic slump. Adjusted operating margin will be about 28 percent, the company said. SAP previously forecast the operating margin would be between 28.5 percent and 29 percent.

Dexia SA sank 5 percent to 3.75 euros. The world's biggest lender to local governments said its Slovakia unit was hit by ``excessive'' currency exposure, resulting in a negative impact at the parent level of 82 million euros ($103 million).

Aegon NV jumped 6.8 percent to 3.61 euros. The owner of U.S. insurer Transamerica Corp. got a 3 billion-euro lifeline from the Netherlands, making it the second Dutch financial company to draw on the government's bailout program.

Aegon will issue 750 million non-voting securities at 4 euros apiece to Vereniging Aegon, its largest shareholder, The Hague- based insurer said today in a statement. Vereniging Aegon will in turn be funded by the Dutch state.

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