By Adam Haigh
Oct. 19 (Bloomberg) -- Stocks in Europe and Asia climbed and U.S. futures rose as Nomura Holdings Inc. forecast earnings will support further gains in equities and National Express Group Plc got a 1.7 billion-pound ($2.8 billion) merger bid.
Royal Dutch Shell Plc and Cnooc Ltd. surged more than 1.9 percent as crude traded above $78 a barrel in New York. National Express jumped 9.1 percent after saying it received a “highly preliminary” merger proposal from Stagecoach Group Plc. Nestle SA increased 4 percent after UBS AG recommended the world’s largest food company.
Europe’s Dow Jones Stoxx 600 Index added 0.9 percent to 247.74 at 10:55 a.m. in London. The gauge has rallied 57 percent since March 9 as Royal Philips Electronics NV reported an unexpected third-quarter profit and results from Intel Corp., JPMorgan Chase & Co. and Google Inc. beat analysts’ estimates. The surge has pushed valuations on the index to 49.3 times reported earnings, near the most expensive level since July 2003, Bloomberg data show.
“I’m very much a bull,” said Chris McGale, head of European equities at Pali International Ltd. in London. “Equity markets will continue to push higher,” he said in a Bloomberg Television interview.
The MSCI Asia Pacific Index and futures on the Standard & Poor’s 500 Index added 0.6 percent.
U.S. Earnings
U.S. earnings in the third quarter will probably beat analysts’ projections, resulting in upgrades that should support a further rally through the end of the year, Nomura strategists including Shanthi Nair wrote in a report. The brokerage increased its forecast for 2010 operating-profit growth, saying earnings will advance 30 percent from the year before.
Of the 37 companies in the S&P 500 to have reported pre- share profits since Oct. 7, 84 percent have topped estimates, according to data compiled by Bloomberg.
The U.K. economy will grow twice as fast as previously expected next year as the country pulls out of the worst recession in a generation, according to Ernst & Young LLP’s Item Club, which uses the same model as the U.K. Treasury. Gross domestic product will increase 1 percent in 2010, compared with a 0.5 percent forecast in July, the researchers said.
Shell, Europe’s largest oil producer, gained 1.9 percent to 1,894 pence. Cnooc, China’s state-owned producer, climbed 4.2 percent to HK$12.42. Crude was little changed near a one-year high in New York.
National Express, Stagecoach
National Express soared 9.1 percent at 395 pence after saying it received a “highly preliminary” proposal from Stagecoach for an all-share transaction in which National Express shareholders would hold no more than 40 percent of the enlarged group.
National Express will “carefully consider” the proposal while continuing to progress with its plans for an equity fund raising, it said yesterday. Stagecoach said in a separate statement that at the invitation of National Express it submitted a letter to the board indicating the terms under which it would hold talks on a “possible combination.” Stagecoach slipped 2.1 percent to 153.6 pence.
Nestle gained 4 percent to 45.12 Swiss francs, the biggest jump in five months, as UBS raised its recommendation on the shares to “buy” from “neutral.”
Today is the 22nd anniversary of “Black Monday,” when an increase in U.S. interest rates and slowing economic growth sparked a slump that sent the Dow Jones Industrial Average down 23 percent and the S&P 500 20 percent lower in one day.
William Hill, Technip
William Hill Plc soared 8.6 percent to 174.9 pence, posting the steepest gain among all shares on the Stoxx 600. Third- quarter net revenue at the U.K.’s second-biggest bookmaker declined less than that of competitor Ladbrokes Plc.
Technip SA added 3.3 percent to 49.34 euros, gaining for a second day. Europe’s second-largest oilfield-services provider forecasts an increase in the level of new projects awarded in 2010, Chief Executive Officer Thierry Pilenko told Les Echos in an interview. The recovery could be “quite strong” at the end of 2010 and the start of 2011, the newspaper cited Pilenko as saying.
Separately, Technip is joining with Saudi partners to win contracts from oil company Saudi Aramco, according to senior vice president for the Middle East, Arturo Grimaldi. Technip is also seeking contracts in Iraq and plans to open an office in the country, Grimaldi said today at a conference in Abu Dhabi.
Acergy SA gained 4.8 percent to 76.35 kroner, the third- steepest increase on the Stoxx 600, after it was awarded a contract valued at approximately $500 million from Chevron Nigeria Ltd. for their gas development program in Escravos, offshore Nigeria.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net
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