Bloomberg: European Stocks Rise, Led by Total, Shell as Oil Price Gains (ShellNews.net)

Oct. 7 (Bloomberg) -- European stocks rose, led by energy companies Total SA and Shell Transport & Trading Co., as oil traded near a record, boosting optimism about the industry's earnings prospects.

``Earnings forecasts for energy companies are still too low,'' said Jason Holzer, who oversees $850 million of European stocks for the AIM International Growth and Emerging Growth Fund at AIM Advisors Inc. in Houston, Texas, speaking yesterday.

The Dow Jones Stoxx 600 Index rose 0.5 percent to 245.37 as of 8:12 a.m. in London, with all 18 industry groups gaining. The Stoxx 50 added 0.5 percent, as did the Euro Stoxx 50, a benchmark for the 12 countries using the euro. That index gained for the fifth successive day.

Crude oil for November delivery rose as much as 0.8 percent to $52.45 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest price since oil futures began trading in New York in 1983. A U.S. Energy Department report yesterday showed oil inventories gained less than some analysts expected.

Total, Europe's third-largest oil company, added 0.4 percent to 170 euros. Shell, which owns 40 percent of the Royal Dutch/Shell Group of companies, rose 0.9 percent to 425 pence.

Interest Rates

The European Central Bank will probably keep its benchmark lending rate at a six-decade low today to aid an economic recovery threatened by record oil prices and rising unemployment, a survey of economists showed.

The Bank of England probably will also keep its benchmark interest rate unchanged today, as a drop in factory output and weaker growth in services indicated that higher borrowing costs are damping growth, a survey of economists showed.

Benchmark indexes gained in all of the 14 Western European markets that were open except Portugal. France's CAC 40 Index gained 0.3 percent, while Germany's DAX Index and the U.K.'s FTSE 100 Index both gained 0.2 percent. December futures on the Euro Stoxx 50 added 0.1 percent.

Banca Intesa SpA, Italy's largest lender, gained 0.8 percent to 3.11 euros. The bank said after the close of markets that it agreed to pay 160 million euros ($197 million) to Parmalat Finanziaria SpA to avoid legal action over a bond sale months before the company collapsed in the country's biggest bankruptcy.

Bayerische Motoren Werke AG, the world's No. 2 maker of luxury cars, added 0.7 percent to 34.90 euros. The stock was raised to ``buy'' from ``neutral'' at UBS AG.

Givaudan

Givaudan SA, the world's biggest maker of fragrances and flavors, shed 0.7 percent to 755 francs. The company said third- quarter sales declined 3.9 percent to 666.3 million francs ($527.7 million) from 693 million francs in the same period a year ago, after demand for flavors slowed.

U.S. stocks rose as optimism about third-quarter earnings overshadowed record oil prices. Alcoa Inc. and General Electric Co., which report results this week, rallied to lift the Standard & Poor's 500 Index to a three-and-a-half month high. An index of energy shares including Exxon Mobil Corp. jumped 1.7 percent, leading the advance.

The U.S. Labor Department releases its September employment data tomorrow. Europe's biggest trading partner may have added 150,000 non-farm jobs last month, according to a Bloomberg News survey, compared with 144,000 in August.

To contact the reporter on this story:

Brian McGee in London at  bmcgee3@bloomberg.net.

To contact the editor responsible for this story:

Daniel Tilles at  dtilles@bloomberg.net.