Stocks advance in Europe, Asia

Stocks rose in Europe and Asia as Merrill Lynch & Co said the worst of the credit markets' turmoil is over, Goldman Sachs Group Inc advised buying mining shares and companies announced more than $11 billion of mergers. US index futures advanced.

UBS AG rallied to a five-week high after Merrill upgraded the stock, and Washington Mutual Inc surged more than 10 percent in Frankfurt as the Wall Street Journal said the company may get $5 billion from an investment group. Anglo American Plc jumped as Goldman added the mining company to its "conviction buy" list.

The MSCI World Index added 0.3 percent to 1,496.41 at 11:59 am in London, extending its biggest weekly advance in a year. Futures on the Standard & Poor's 500 Index rose 0.8 percent.

The MSCI World has dropped 5.8 percent this year on concern losses related to the US subprime market will erode earnings and push the world's largest economy into recession.

Europe's Dow Jones Stoxx 600 Index added 0.8 percent with all 18 national markets advancing.

The MSCI Asia Pacific Index increased 0.7 percent to a five-week high.

UBS climbed 6.2 percent to 35.52 Swiss francs after Merrill raised the stock to "buy" from "hold", adding the shares to its "Europe 1" list.

"First and foremost this is a valuation call," London-based analyst Derek De Vries wrote in a note to clients yesterday. "We think investor focus will move away from the balance sheet and focus will return to the underlying value of UBS."

In a separate note, Merrill raised European banks to "neutral", saying credit markets are "past their worst" and that banks have acknowledged the extent of the crisis.

Agencies

(China Daily 04/08/2008 page17)