European, Asian Shares Climb; U.S. Stock-Index Futures Advance

By Daniela Silberstein

Dec. 1 (Bloomberg) -- European and Asian shares gained as manufacturing grew in China and Europe and concern eased that losses from a possible default by Dubai World will spread. U.S. stock-index futures advanced.

HSBC Holdings Plc and Deutsche Bank AG rose more than 2 percent. BHP Billiton Ltd. led basic-resources companies higher on signs the Chinese economy is boosting global growth. Alstom SA and Schneider Electric SA climbed more than 4 percent as the two companies entered exclusive talks to buy Areva SA’s power- grid unit. Nissan Motor Co. and Komatsu Ltd. increased after the Bank of Japan announced an emergency policy meeting, sending the yen lower against the dollar.

Europe’s Dow Jones Stoxx 600 Index added 1.9 percent 243.72 as of 9:47 a.m. in London. The measure has surged 23 percent this year amid signs the global economy is recovering. Stocks in the European benchmark index are valued at about 55 times reported earnings, near the highest level since June 2003, according to data compiled by Bloomberg.

“The sense has grown that the influence from the Dubai situation will not be as big and we had positive surprises from the economic data in Europe,” said Daniel Knuchel, who oversees about $3 billion as chief investment officer at AAM Privatbank AG in Zurich. “The market is vulnerable to shocks and we need positive economic number to keep the gains going.”

Asian, U.S. Shares

The MSCI Asia-Pacific Index rallied 1.4 percent today, and futures on the Standard & Poor’s 500 Index added 0.8 percent. The benchmark measure for U.S. equities gained 0.4 percent yesterday as Dubai World, the investment company seeking to delay repayment on some of its $59 billion of liabilities, said it began “constructive” talks with banks to restructure about $26 billion in debt.

Debt from subsidiaries such as Infinity World Holding, Istithmar World and Ports & Free Zone World will be excluded from the restructuring negotiations because those companies “are on a stable financial footing,” Dubai World, one of the emirate’s three main state-related holding companies, said.

HSBC climbed 2.9 percent to 727.3 pence, the steepest intraday gain in two weeks. Europe’s largest bank expects concerns about Dubai World’s debt will have a limited impact on financial markets, Apple Daily reported, citing Vincent Cheng, chairman of the bank’s Asian operations.

Deutsche Bank, Germany’s biggest lender, increased 2.1 percent to 49.09 euros. Management board member Juergen Fitschen said concerns over Dubai World’s request for a standstill on debt repayment are “manageable.”

KBC Climbs

KBC Groep NV soared 4.3 percent to 30.90 euros. Belgium’s biggest bank by market value was rated “overweight” in new coverage at Morgan Stanley, which cited its “credible restructuring plan and compelling value.”

BHP Billiton, the world’s largest mining company, rose 2.5 percent to 1,904.5 pence and Rio Tinto Group, the third-biggest, added 3.3 percent to 3,189 pence as copper gained on the London Metal Exchange.

Eurasian Natural Resources Corp. climbed 5.3 percent to 907.5 pence. BofA Merrill Lynch Global Research added the Kazakh ferroalloy producer to its “Europe 1” list.

Alstom advanced 6.4 percent to 49.59 euros. The maker of high-speed trains and energy-generation equipment and Schneider Electric, a maker of electrical circuits, are in exclusive negotiations with Areva of France for its power-grid subsidiary, knocking out overseas bids from General Electric Co. and Toshiba Corp. Schneider added 4.5 percent to 76.13 euros.

Vivendi, Nissan

Vivendi SA climbed 2.7 percent to 19.71 euros. GE and the owner of the world’s largest music company agreed on a $5.8 billion valuation for the French company’s 20 percent stake in NBC Universal, according to two people with knowledge of the discussions.

Greene King Plc surged 8.1 percent to 433.9 pence, the biggest gain in the Stoxx 600. The U.K. pub owner and brewer of Old Speckled Hen ale said first-half net income rose 85 percent as the company increased its focus on food sales.

Nissan, which gets 35 percent of its revenue from North America, gained 3 percent to 645 yen and Komatsu, which generates 22 percent of sales from the Americas, jumped 4.3 percent to 1,771 yen on speculation possible steps by the central bank aimed at weakening the yen will help boost the value of Japanese exports.

The BOJ said it will provide short-term loans to commercial banks amid pressure from Prime Minister Yukio Hatoyama’s administration to address falling prices and the yen’s surge to a 14-year high. The cental kept the key overnight lending rate at 0.1 percent.

Australian Interest Rates

Australia’s central bank raised its benchmark interest rate by a quarter percentage point for an unprecedented third straight month as evidence mounts that the nation’s economy is strengthening.

China’s purchasing managers’ index released today by HSBC rose to a seasonally adjusted 55.7 in November from 55.4 the previous month. The government’s PMI, also released today, held at an 18-month high.

Europe’s manufacturing industry grew for a second month in November after the euro-region economy emerged from its worst recession in more than six decades. An index of manufacturing in the 16-nation euro area rose to 51.2 from 50.7 in October, London-based Markit Economics said. That was higher than an estimate of 51 released on Nov. 23.

German unemployment fell in November as government measures discouraged firings and the economy recovered from recession. The number of people out of work fell a seasonally adjusted 7,000 to 3.42 million, according to the Nuremberg-based Federal Labor Agency.

Manufacturing in the U.S. probably expanded for a fourth consecutive month, putting factories at the forefront of the recovery, economists said before reports today. The Institute for Supply Management’s manufacturing index fell to 55 from October’s three-year high of 55.7, according to the median forecast of 72 economists surveyed by Bloomberg News.

Other U.S. reports may show pending sales of existing homes and construction spending declined in October.

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