Oct. 31 (Bloomberg) -- European stocks rose, trimming the Dow Jones Stoxx 600 Index's worst monthly slump since September 2002, as the regional gauge traded near the cheapest in at least six years and lower oil pushed retailers and travel-related companies higher.

Rio Tinto Group and ABB Ltd. led gains by mining and industrial companies, the region's worst-performing shares in the past three months. Tesco Plc, the U.K.'s largest retailer, climbed 4.1 percent, and Ryanair Holdings Plc added 10 percent as oil headed for a record monthly drop. Sanofi-Aventis SA advanced 4.8 percent after France's largest drugmaker increased its forecast for a second time this year.

The Dow Jones Stoxx 600 Index climbed 2.7 percent 222.06 in London, leaving the gauge down 13 percent in October. The index traded at 8.8 times reported earnings of its companies yesterday, close to the lowest since at least January 2002.

``There is some hope that a lot of the forced selling has been done,'' said Philippe Gijsels, a Brussels-based senior equity strategist at Fortis Global Markets, which has $62 billion under management. ``We are seeing plenty of long-term buying opportunities which should offer some support.''

National benchmark indexes rose in 17 of the 18 western European markets. The U.K.'s FTSE 100 advanced 2 percent, while France's CAC 40 gained 2.3 percent. Germany's DAX rallied 2.4 percent.

Central banks and governments from Washington and London to Beijing and Tokyo stepped up efforts this month to salvage the global economy amid the deepest financial crisis since the Great Depression.

Barclays, BT Group

This month's sell-off erased more than $9.5 trillion from the value of stocks worldwide, almost one-third of the total value lost this year. Credit-related losses and writedowns by financial firms topped $684 billion, threatening to stifle economic and profit growth.

Earnings for the 754 companies in western Europe that reported results since Oct. 7 declined 5.3 percent on average, trailing analysts' expectations by 2.2 percent, according to data compiled by Bloomberg. Companies from Nokia Oyj, the world's biggest maker of mobile phones, to BASF SE, the largest chemicals supplier, have reported earnings that missed analyst estimates.

Profit for companies in the Stoxx 600 will decline 4.4 percent in 2008, according to estimates compiled by Bloomberg. That's down from 11 percent growth predicted the start of the year, the data show.

Stocks rebounded this week, with the Stoxx 600 posting the best performance since September 2001, amid signs the paralysis in credit markets was easing. The index climbed back from a five- year low reached on Oct. 27 to end the week up 11 percent UBS AG and Standard Chartered Plc led the rally.

Slashing Rates

The U.S. Federal Reserve cut rates this week for the second time this month and provided $120 billion to South Korea, Singapore, Brazil and Mexico to unlock lending in emerging markets. The Bank of Japan today joined central banks from China, Hong Kong and Taiwan in also reducing borrowing costs.

The European Central Bank and Bank of England, which have already cut their rates by half a point, are poised to deliver further half-point reductions on Nov. 6, surveys of economists show.

The MSCI Emerging Markets Index has lost 28 percent in October even after a 20 percent rally this week. Russia's Micex Index soared 43 percent from this year's low on Oct. 24, bringing the measure out of a bear market as the government bought equities to shore up confidence.

Iceland was the worst-performing market this month following the collapse of the nation's largest banks. The OMX Iceland ICEX 15 plunged a record 81 percent, the biggest drop among 89 benchmark indexes monitored by Bloomberg worldwide.

Money Rates Ease

Money-market rates have eased. The London interbank offered rate, or Libor, that banks charge each other for three-month loans in dollars dropped more than 16 basis points to 3.03 percent, its 15th straight decline, the British Bankers' Association said.

The U.S. commercial paper market expanded for the first time in seven weeks in the week ending Oct. 29 as the Fed purchased $145.7 billion of 90-day paper from companies including American Express Co. and General Electric Co., part of its efforts to free up lending.

Meanwhile, corporate debt markets in Europe endured their worst month on record as investors demanded the highest yields relative to government debt in a decade to buy corporate bonds.

Reports today indicated Spain's economy is shrinking, while consumer confidence in the U.K. slumped in October close to the weakest level since at least 1974. Retail sales in Germany, the region's largest economy, fell more than economists expected last month.

Rio, ABB

Rio Tinto, the world's third-biggest mining company, climbed 3.5 percent to 2,864 pence. Anglo American Plc, the fourth- biggest diversified mining company, rose 6.5 percent to 1,532 pence.

ABB, the largest builder of electricity grids, gained 5.7 percent to 14.95 francs.

Crude oil fell in New York, poised for its biggest monthly drop since trading began in 1983, on concern the decline in the U.S. economy will curb demand for the fuel. Crude oil for December delivery fell as much as $2.84, or 4.3 percent, to $63.12 a barrel.

Tesco added 4.1 percent to 339.4 pence. Ryanair, Europe's biggest discount airline, rose 10 percent to 2.75 euros. Deutsche Lufthansa AG, Germany's biggest airline, gained 2 percent to 10.94 euros. FirstGroup Plc, Britain's biggest train operator, advanced 4.2 percent to 408.25 pence.

Sanofi, BT Group

Sanofi rose 4.8 percent to 49.43 euros. The drugmaker raised its forecast and reported third-quarter profit that beat analyst estimates. Net income excluding some items was 1.92 billion euros ($2.46 billion), or 1.47 euros a share, beating the median 1.41- euro estimate of five analysts surveyed by Bloomberg.

BT Group Plc, the U.K.'s largest phone company, slumped 19 percent to 115.1 pence. Second-quarter earnings missed its targets amid the economic slowdown. Earnings before interest, taxes, depreciation and amortization as well as earnings per share were ``slightly below expectations'' in the three months through September, the company said.

Barclays Plc lost 13 percent to 178.9 pence. The second- biggest U.K. bank took 1.2 billion pounds ($1.9 billion) of new credit markdowns, adding to 2.8 billion pounds in the first half, it said today. It will sell 5.8 billion pounds of convertible notes to investors including funds in Abu Dhabi and Qatar to restore capital without tapping the U.K.'s bailout plan.

L'Oreal SA sank 3 percent to 59.015 euros. The world's biggest cosmetics maker cut sales and profit forecasts for the third time in less than four months. Third-quarter sales increased 3.4 percent to 4.27 billion euros ($5.5 billion), missing the 4.36 billion-euro median estimate of nine analysts surveyed by Bloomberg News.

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

Last Updated: October 31, 2008 13:11 EDT