European Stocks Gain as Renault Climbs; U.S. Index Futures Fall

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October 28, 2011, 4:24 AM EDT By Adam Haigh

Oct. 28 (Bloomberg) -- European stocks rose, with the Stoxx Europe 600 Index extending its best month since April 2009, as the region’s debt deal and results from Renault SA to Electrolux AB reassured investors that the global recovery is intact. Asian shares increased, while U.S. index futures slid.

Renault, France’s second-biggest carmaker, gained 4.5 percent as third-quarter sales topped analysts’ estimates. Electrolux surged 7.5 percent as the Swedish maker of household appliances reported net income for the third quarter that exceeded forecasts.

The Stoxx 600 rose 0.4 percent to 250.39 at 8:58 a.m. in London. The gauge has climbed 4.8 percent so far this week as the region’s leaders boosted their rescue fund’s capacity to 1 trillion euros ($1.4 trillion) in a bid to stem the debt crisis and earnings at companies from BASF SE to Merck KGaA beat analysts’ estimates.

“They’ve thrown a reasonably good package together,” said Phil Webster, who manages pan-European equity funds at Aberdeen Asset Management Plc in London. “They’re agreeing on something. Yes, banks and politics and economics have been raging on one side, but I actually think companies are in pretty good shape all in all.” Aberdeen has about $200 billion in assets under management.

Futures contracts on the Standard & Poor’s 500 Index expiring in December slid 0.4 percent and the MSCI Asia Pacific Index advanced 1.2 percent.

European Stock Valuations

The Stoxx 600 has fallen 9.2 percent this year amid concern that the euro area’s sovereign debt crisis will hamper growth. The gauge is trading at 10.8 times the estimated earnings of its companies, compared with the average multiple of 12 during the past five years, according to data compiled by Bloomberg. More than half of the 134 companies in the Stoxx 600 that have released earnings since Oct. 11 beat analysts’ profit estimates, according to data compiled by Bloomberg.

In the U.S., reports today will probably show increases in income and spending as well as an upward revision to consumer confidence, Bloomberg surveys of economists indicate.

Renault jumped 4.5 percent to 31.68 euros. The carmaker said revenue increased to 9.75 billion euros from 8.71 billion euros a year earlier. That beat the 9.63 billion-euro average of four analyst estimates compiled by Bloomberg. Societe Generale SA upgraded its stance on the shares to “buy” from “hold.”

Electrolux rallied 7.5 percent to 127.40 kronor. Third- quarter net income fell to 826 million kronor ($130 million) from 1.38 billion kronor a year earlier. Sales dropped to 25.65 billion kronor from 26.33 billion kronor. Both profit and sales exceeded analysts’ estimates in a Bloomberg survey.

Linde AG, the world’s second-biggest maker of industrial gases, climbed 1.6 percent to 117.80 euros after reporting third-quarter earnings that beat analysts’ estimates, helped by cost savings and higher demand from emerging markets.

SSAB AB surged 11 percent to 69.45 kronor after posting third-quarter net income and sales that topped estimates.

--With assistance from Steve Rothwell in London. Editors: Will Hadfield, Andrew Rummer

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

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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