Stocks in Europe, Asia Rise, Led by UBS; U.S. Futures Decline

By Adria Cimino

Oct. 1 (Bloomberg) -- Stocks in Europe and Asia rose, led by banks and commodity producers, as investors speculated lawmakers will revive a $700 billion plan to rescue the American financial system. U.S. stock-index futures fell.

UBS AG, the European bank with the biggest losses from the credit crisis, climbed 5.9 percent and Westpac Banking Corp. rallied 6.7 percent in Australia after the Senate set a vote for tonight on the bailout plan. Anglo American Plc gained 6.3 percent, and BG Group Plc jumped 2.7 percent as copper rebounded and oil advanced for a second day.

The MSCI World Index added 0.8 percent to 1,191.23 at 8:42 a.m. in London as all 10 industry groups increased. Europe's Dow Jones Stoxx 600 Index advanced 0.6 percent, while the MSCI Asia Pacific Index increased 1.7 percent. Futures on the Standard & Poor's 500 Index lost 0.8 percent before a report that may show manufacturing contracted at a faster pace in September.

``It's certainly good if the package comes through,'' said Bernhard Maeder, who oversees the $793 million Credit Suisse Equity Fund at Credit Suisse Asset Management in Zurich. ``We have to instill trust. My scenario is policy will work, trust will come back and yes we do have upside.''

The Senate tied a revived plan to an increase in bank- deposit-insurance limits and tax breaks to win support from Republicans.

Japanese and Australian money-market rates fell as central banks pumped $15 billion into the system and U.S. lawmakers worked on the plan.

Treasuries, Dollar

Treasuries advanced and the dollar traded near a two-week high against the euro. The U.S. currency was also close to its strongest level in two weeks versus the British pound.

China, Hong Kong, Indonesia, the Philippines, Malaysia and Singapore were shut for holidays today.

U.S. stocks jumped the most in six years yesterday after President George W. Bush urged passage of the plan designed to rid financial institutions of bad loans. More than $1 trillion in market value was erased on Sept. 29 in the worst day for the Standard & Poor's 500 Index since the ``Black Monday'' crash of 1987 after the House of Representatives rejected the plan.

Europe's Stoxx 600 fell 11 percent in September, the worst monthly slump since January, after Lehman Brothers Holdings Inc. filed for bankruptcy, American International Group Inc. was taken over by the U.S. Treasury and Washington Mutual Inc. was seized by regulators in the biggest U.S. bank failure in history.

``We're optimistic the government plan will be adopted by the end of the week,'' said Francois Savary, a strategist at Reyl & Cie in Geneva. ``We have to stop these successive bankruptcies. The plan will be able to stop this domino effect.''

UBS, Westpac

UBS advanced 5.9 percent to 19.55 francs. The company may announce plans to eliminate about 1,900 jobs in its investment banking, equities, and fixed income units at its shareholder meeting tomorrow, two people with knowledge of the matter said.

Separately, Dresdner Kleinwort analysts said UBS may pre- announce earnings tomorrow. The bank may post a profit in the third quarter, according to the analysts.

Barclays Plc, the third-biggest U.K. bank, jumped 6.3 percent to 347 pence.

Westpac, Australia's third-largest bank, gained 6.7 percent to A$22.91. Nomura Holdings Inc., Japan's largest brokerage, jumped 5.9 percent to 1,404 yen.

Anglo American, the world's fourth-largest diversified metal company, climbed 6.3 percent to 1,972 pence. Kazakhmys Plc, Kazakhstan's biggest copper producer, rallied 6.2 percent to 607.5 pence. Copper rose for the first time in four days in London. Nickel, lead, tin and zinc also advanced.

Xstrata, BHP

Xstrata Plc gained 8 percent to 1,854 pence. The world's fourth-largest copper producer said it does not intend to make a takeover offer for Lonmin Plc because of ``extreme volatility and uncertainty in the financial markets.''

Lonmin plunged 23 percent to 1,755 pence.

BHP Billiton Ltd. rose 4.3 percent 1,313 pence after Australia's competition regulator approved its hostile $101 billion bid for rival Rio Tinto, boosting speculation that the world's largest mining takeover may succeed. Rio gained 7 percent to 3,714 pence.

Crude oil for November delivery rose as much as 1.6 percent to $102.24 on the New York Mercantile Exchange on optimism that the passage of the bailout plan may avert an economic slowdown.

BG Group, the U.K.'s third-biggest oil and gas company, gained 2.7 percent to 1,040 pence. BP Plc, Europe's second- largest oil company, gained 1.1 percent to 469.25 pence.

Fortis jumped 2.7 percent to 4.52 euros. The bank rescued by Belgium, the Netherlands and Luxembourg said the 2.15 billion-euro ($3 billion) sale of half its asset management arm to China's Ping An Insurance (Group) Co. may collapse because of the worsening credit crisis.

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