European, Asian Stocks Advance, Led by China; U.S. Futures Gain

By Daniela Silberstein

Aug. 20 (Bloomberg) -- European and Asian stocks climbed, led by the biggest surge in Chinese shares since March, as an advance in commodities lifted raw-material producers.

Royal Dutch Shell Plc, Europe’s biggest oil company, and BHP Billiton Ltd. added more than 1.2 percent as crude traded near the highest level since June and copper rallied. Holcim Ltd. surged 6.7 percent after earnings beat estimates. UBS AG advanced 3.9 percent after the Swiss government said it plans to sell its $5.6 billion stake in the country’s biggest bank.

Europe’s Dow Jones Stoxx 600 Index climbed 1.1 percent to 228.92 at 1:36 p.m. in London, as all 19 industry groups rose. The gauge has soared 45 percent since March 9 as companies from Roche Holding AG to Johnson & Johnson reported better-than- estimated results and Germany and France unexpectedly returned to economic growth. The increase left the measure valued at 40.3 times the profits of its companies, near the most expensive level since 2003, data compiled by Bloomberg show.

“The markets still feel constructive,” Neil Dwane, who helps oversee $80 billion as chief investment officer at Allianz Global Investors’ RCM unit in Frankfurt, said in a Bloomberg Television interview. “There have been concerns about China but on the other side there’s good corporate news. Earnings are coming in strong.”

Asian, U.S. Shares

The MSCI Asia Pacific Index increased 1.4 percent, while China’s Shanghai Composite Index rallied 4.5 percent after briefly falling into a bear market yesterday.

Standard & Poor’s 500 Index futures expiring in September pared an earlier advance of 0.7 percent and were little changed after a Labor Department report showed more Americans unexpectedly filed claims for jobless benefits last week.

Shell gained 1.2 percent to 1,607 pence as oil traded above $72 a barrel after U.S. inventories declined the most in 15 months.

BHP Billiton, the world’s biggest mining company, rose 2.3 percent to 1,569 pence and Alcoa Inc., the largest U.S. aluminum producer, gained 1.5 percent to $12.67 in German trading. Copper rallied from a two-week low in London.

Rio Tinto Group added 1.4 percent to 2,344 pence even after the world’s third-largest mining company said first-half profit tumbled 65 percent to $2.5 billion. Chief Executive Officer Tom Albanese, speaking on a conference call, said the company is in “early stage” talks with Aluminum Corp. of China on cooperation on operations. Rio also said it may pay a final dividend for 2009.

Holcim, UBS

Holcim climbed 6.7 percent to 69.8 Swiss francs. The world’s second-biggest cement maker raised its 2009 savings target by 60 percent to 600 million francs ($563 million) after reaching the previous full-year goal in the first half alone. Second-quarter profit fell 35 percent to 453 million francs. That beat a median estimate of 436 million francs of seven analysts surveyed by Bloomberg News.

UBS gained 3.9 percent to 17.39 francs. The Swiss government said it plans to sell its 6 billion-franc investment in the bank by today after signing an agreement with the U.S. yesterday over data on bank clients suspected of evading taxes.

Royal Ahold NV climbed 2.4 percent to 8.34 euros. The biggest Dutch food retailer posted second-quarter profit that beat analysts’ estimates as price cuts lured more shoppers.

Voestalpine AG rallied 3.5 percent to 21.35 euros. Austria’s biggest steelmaker reiterated that it expects to make a profit in fiscal 2010. The company reported a first-quarter net loss after payment to hybrid bondholders of 67.3 million euros ($95.8 million), narrower than the 92.8 million-euro median forecast of nine analysts surveyed by Bloomberg News.

YIT Jumps

YIT Oyj soared 6.1 percent to 9.56 euros. Finland’s biggest builder raised its annual sales growth target to an average 5 to 10 percent per year. Previously the target was for “positive growth.”

Royal Boskalis Westminster NV climbed 9.2 percent to 20.51 euro, the steepest gain in the Stoxx 600. The world’s largest dredging company said second-half earnings will be comparable to the first half, when net profit was 102.7 million euros.

SIG Plc, Europe’s largest supplier of insulation and roofing, rose 7.6 percent to 134.4 pence after deepening a program of cost cutting and predicting a turnaround in its markets next year.

Hochtief AG gained 5.9 percent to 51.90 euros after Deutsche Bank AG upgraded Germany’s biggest construction company to “buy” from “hold.”

Brambles Ltd. jumped 3.6 percent to A$7.15 in Australia. The world’s biggest supplier of pallets said annual net income fell 30 percent to $452.6 million, exceeding analysts’ estimates.

Bank of Communications

Bank of Communications Ltd. gained 1.3 percent to HK$9.19 in Hong Kong. China’s fourth-largest lender said net income for the second-quarter was little changed at 7.62 billion yuan ($1.1 billion). That topped than the average estimate of 7.24 billion yuan from nine analysts in a Bloomberg survey.

The Conference Board’s gauge of the U.S. economic outlook for the next three to six months rose 0.7 percent for a second month, according to the median forecast of 52 economists surveyed by Bloomberg News. Other reports may show first-time jobless claims fell and manufacturing in the Philadelphia region contracted at a slower pace.

U.K. retail sales increased for a second month in July as shoppers bought more furniture and electrical goods, the Office for National Statistics said today in London, a sign consumer spending is reviving as the recession eases. Mortgage approvals by the six biggest U.K. banks climbed to the highest this year, the Bank of England said today.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.