European Stock-Index Futures Rise; Shell, Air Berlin May Gain

By Adam Haigh

Nov. 27 (Bloomberg) -- European stock-index futures rose, following gains in the U.S. and Asia, as crude rallied after the close of European markets, boosting the earnings prospects for oil producers.

U.S.-traded securities of Royal Dutch Shell Plc and BP Plc, Europe’s two largest energy companies, climbed more than 2 percent. Air Berlin Plc will probably rally after posting a 43 percent jump in third-quarter profit. Intesa Sanpaolo SpA may advance after JPMorgan Chase & Co. recommended shares of the Italian bank.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, added 18, or 0.8 percent, to 2,405 at 7:37 a.m. in London. The U.K.’s FTSE 100 Index is set to open 43 points higher, according to IG Markets.

The Standard & Poor’s 500 Index jumped the most since 1933 yesterday as higher oil lifted energy shares. Benchmark indexes erased earlier declines after President-elect Barack Obama picked former Federal Reserve Chairman Paul Volcker to head an economic advisory board and said he will implement a plan to bolster growth on “day one.”

Gains in the U.S. “will be reflected in European markets as Thursday’s session gets underway,” said London-based Matt Buckland, a trader at CMC Markets, a spread-betting firm. “With U.S. markets closed, however, there may be a struggle trying to find anything meaningful to offer fresh direction.”

Asian shares rose for a third day. India halted stocks, bonds and rupee trading today for the first time in more than three years after terrorist attacks killed 101 people in Mumbai’s financial hub.

Earnings Tally

Europe’s Stoxx 600 has fallen 45 percent in 2008, headed for its biggest annual declined on record, as credit losses and writedowns approach $1 trillion in the worst financial crisis since the Great Depression.

Analysts have slashed earnings estimates this year as economies from Europe and the U.K. to the U.S. slip into recession. Profit for companies in the Stoxx 600 will slide 12 percent in 2008, compared with 11 percent growth forecast at the start of the year, the data show.

Earnings for the 324 companies in the index that reported results since Oct. 7 declined 15 percent on average, trailing expectations by 6.4 percent, Bloomberg data show.

American depositary receipts of Shell, Europe’s largest oil producer, rose 2.2 percent above the closing price in London yesterday and ADRs of BP, the region’s second biggest, added 2.1 percent higher.

Crude jumped $3.67, or 7.2 percent, to $54.44 a barrel yesterday after China, the world’s second-biggest energy- consuming country, cut interest rates by the most in 11

Air Berlin, Intesa

Air Berlin Plc rose as much as 14 percent to 3.41 euros in pre-market trading at Lang & Schwarz Wertpapierhandelsbank AG. Europe’s third-biggest discount airline reported net income jumped 43 percent in the third quarter to 45.6 million euros.

Intesa Sanpaolo may rise. JPMorgan upgraded the stock to “overweight” from “neutral,” saying the shares have underperformed since the reporting earnings from the third quarter. The brokerage has a price estimate of 3.1 euros, 29 percent higher than yesterday’s closing price.

Repsol YPF SA may be active after Expansion reported OAO Lukoil, Russia’s second-largest oil company, reduced the price it will offer for a minority stake in Spain’s largest oil company. The Moscow-based company lowered its offer price for an almost 30 percent stake to between 22 to 24 euros a share, down from 27 euros a share, the newspaper said.

Kingfisher

Kingfisher Plc, Europe’s largest home-improvement retailer, said consumer confidence has bean “shaken” in all its markets and reported a 4 percent decline in third-quarter profit.

Old Mutual Plc may be active after the largest insurer in Africa stopped the sale of Mutual & Federal Insurance Co., South Africa’s second-largest property insurer.

“While the process had reached an advanced stage, it was materially impacted by the increasingly difficult economic conditions,” the London-based insurer said today.

DSG International Plc, the U.K.’s largest consumer- electronics retailer, scrapped its dividend to conserve cash and posted a loss in the first half on costs to restructure its business.

Pennon Group Plc, the water supplier to 1.6 million people in southwest England, may rise after saying first-half pretax profit rose 3.2 percent due higher customer water prices and earnings from its waste business.

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