European stock futures rise
European stock futures advanced, indicating the Dow Jones Stoxx 600 Index will extend the steepest weekly jump since November. Asian shares climbed as oil and metal prices gained.
BHP Billiton Ltd., the world’s largest mining company, rose in Australia as copper rallied to a nine-month high. Total SA, Europe’s biggest oil refiner, may increase as crude rose for a fourth day. Porsche SE may be active after Der Spiegel reported that Volkswagen AG plans to buy all of the automaker’s sports- car division.
Futures on the Euro Stoxx 50, a benchmark for the euro region, added 1 percent to 2,496 at 7:30 a.m. in London. The U.K.’s FTSE 100 Index may gain 29, according to Cantor Index, a betting firm. The MSCI Asia Pacific excluding Japan Index rose 2.3 percent, set to close at the highest level since September. Japan is closed for a holiday.
Standard & Poor’s 500 Index futures added 0.3 percent as a person briefed on the board’s deliberations said CIT Group Inc., the 101-year-old commercial finance company seeking to ward off bankruptcy, may announce an agreement for $3 billion in financing from bondholders as soon as today.
“After some positive gains overnight in Asia it looks like we could be on for a positive start to proceedings here in Europe as traders look to build on what was a bumper last five sessions,” Matthew Buckland, a dealer at CMC Markets in London, wrote. “The news of a last minute resolution for ailing U.S. lender CIT will also boost the market this morning.”
6.8 Percent Rally
Europe’s Stoxx 600 climbed 6.8 percent last week after U.S. companies from Goldman Sachs Group Inc. to Johnson & Johnson reported earnings that beat analysts’ estimates. The gauge has rallied 33 percent since March 9 amid optimism government measures around the world will revive the global economy. U.S. stocks rose last week, propelling the S&P 500 to the biggest weekly advance since March.
CIT needs time to strike deals with bondholders to reduce debt after the U.S. declined to give the firm a second bailout. The funds would give the New York-based company a chance to restructure its debt outside of bankruptcy, said the person, who declined to be identified because the talks are confidential.
A report today may show the gauge of leading indicators in the U.S. climbed for a third consecutive month, according to a Bloomberg survey of economists.
BHP, Rio Tinto
BHP Billiton gained 2.3 percent to A$36. Rio Tinto Group, the world’s third-largest mining company, climbed 1.8 percent to A$53.40. Copper in Shanghai increased for a fifth day, heading for the longest rally since March, on optimism demand for the metal will pick up as the global recession eases.
Total will probably advance. Crude oil rallied above $64 a barrel as Asian stocks gained and Chinese refiners boosted processing to a 16-month high.
The cheapest valuations in at least 14 years are making oil companies too alluring to pass up for UBS AG and Guggenheim Partners LLC, even though earnings in the industry may fall 48 percent this year.
Oil and gas producers in the MSCI World Index traded at $7.84 per dollar of profit this month, less than half the average of $17.10 in the gauge of developed markets and the widest gap since at least 1995, data compiled by Bloomberg show. UBS, Guggenheim and Cohen & Steers Inc. are buying stocks from Exxon Mobil Corp. to Transocean Ltd. because an economic rebound will lift the industry after it generated at least 50 percent more profits than any other group in the past year.
Porsche may move. Volkswagen, Europe’s biggest carmaker, wants to take over all of Porsche AG, the sports-car making business of Porsche SE, Der Spiegel reported on July 18, without saying where it got the information.
VW will buy Porsche AG in two tranches, the magazine reported, initially taking a 49.9 percent stake and buying the remainder at a later stage. Porsche will then become one of 10 Volkswagen brands, according to the magazine.
ASML Holding NV may move. Europe’s largest maker of semiconductor equipment was raised to “buy” from “neutral” at Bank of America Corp., which cited “recovering semiconductor capital spending.”