Nov. 9 (Bloomberg) -- European stocks posted the steepest gain in more than three weeks after the Group of 20 nations agreed to maintain stimulus efforts and Allianz SE, the region’s biggest insurer, reported profit that beat analysts’ estimates.

Allianz jumped the most in six months after third-quarter earnings more than doubled. BHP Billiton Ltd., the world’s largest mining company, led basic-resources shares higher as metals climbed and the dollar fell. Continental AG added 5.2 percent as Citigroup Inc. recommended shares of Europe’s second- largest auto-parts maker.

The Dow Jones Stoxx 600 Index rose 1.9 percent to 245.74, the steepest increase since Oct. 14. The gauge has surged 56 percent since March 9 on signs that government stimulus measures and record-low interest rates are helping to drag the economy out of recession.

“Anything that supports growth is positive,” said Bruno Ducros, a Paris-based fund manager at CamGestion, which oversees about $17 billion. Stimulus packages “are important elements. It’s a necessary link until the consumer starts spending again. It’s needed so economic growth doesn’t contract.”

National benchmark indexes advanced in all of the 18 western European markets, except Iceland and Greece. The U.K.’s FTSE 100 added 1.8 percent. France’s CAC 40 rallied 2.1 percent and Germany’s DAX climbed 2.4 percent. The Stoxx 600 has risen for four straight days, the longest stretch of gains in almost two months.

LSE Glitch

London Stock Exchange Group Plc, Europe’s oldest independent bourse, said a technical problem related to one part of its trading system affected transactions of 1 in 12 U.K. stocks today.

U.K. Chancellor of the Exchequer Alistair Darling, hosting a meeting of finance ministers from G-20 nations, said his colleagues decided to keep supporting their economies. The G-20 agreed to keep interest rates low and maintain record budget deficits until recoveries take hold.

The G-20 split on whether to introduce a so-called Tobin tax on financial trading as part of a broader strategy to ensure the global economy’s expansion is less crisis-prone. U.K. Prime Minister Gordon Brown told the meeting in St. Andrews, Scotland that such a levy could prevent excessive risk taking and fund future bank rescues, adding momentum to a debate begun by France. U.S. Treasury Secretary Timothy Geithner said a “day- by-day” tax on speculation is “not something we’re prepared to support.”

European Economy

German industrial production surged 2.7 percent in September, topping the median economist forecast for 1 percent growth, according to a report from the Economy Ministry in Berlin today. French business confidence climbed for an eighth month in October and the country’s economy will probably expand by 0.5 percent in the fourth quarter, the Bank of France said.

“We expect strength at the year end,” David Crawford, a fund manager at Octopus Investments Ltd. in London, which oversees $2.1 billion, said in a Bloomberg Television interview. “The money is going into companies with global growth. For the market to show further strength, we need to see strength in those stocks that led us up from the bottom, such as financials.”

Allianz advanced 4.3 percent to 82.70 euros, the biggest gain since May 8. Excluding the sale of Dresdner Bank, third- quarter net income rose to 1.32 billion euros ($2 billion), from 545 million euros a year earlier as investment income recovered from year-earlier writedowns. That beat the 1.25 billion-euro median estimate of 18 analysts surveyed by Bloomberg.

Commodity Producers

Basic resources shares advanced the most among the 19 industry groups in the Stoxx 600. BHP Billiton added 4.2 percent to 1,775.5 pence. Rio Tinto Group, the third-biggest mining company, rallied 4.3 percent to 3,042 pence. Copper, lead, nickel and tin rose in London as the dollar slumped as much as 1.2 percent against a basket of six major currencies.

Petropavlovsk Plc, the third-largest producer of gold in Russia, jumped 4.4 percent to 1,284 pence as the precious metal surged to a record.

ArcelorMittal increased 3.5 percent to 24.58 euros. MF Global raised its recommendation on the world’s largest steelmaker to “buy” from “neutral.”

Continental advanced 5.2 percent to 38.49 euros. The company was upgraded to “buy” from “hold” at Citigroup, which cited improved earnings prospects and the potential for a “favorable” debt refinancing next year in a note to clients.

IMI, Aer Lingus

IMI Plc soared 15 percent to 529.5 pence, the biggest gain on the Stoxx 600. The world’s largest maker of pneumatic controls said its earnings for 2009 are likely to be “materially ahead of current consensus.”

Aer Lingus Group Plc surged 9.6 percent to 61.4 euro cents after saying capacity cuts helped stabilize load factors and that a decline in fares may have halted. Third-quarter short- haul fares fell 12.3 percent from a year earlier, Ireland’s second-biggest airline said, compared with a 13.1 percent decline in the first-half of the year.

Givaudan SA rallied 3.3 percent to 805 Swiss francs. The world’s largest maker of fragrances and flavors was raised to “buy” from “neutral” at BofA Merrill Lynch Global Research, which said the stock is an “inexpensive way to invest in the recovery of the consumer in 2010.”

Credit Agricole SA, France’s biggest bank by branches, climbed 4 percent to 14.61 euros. Deutsche Bank AG upgraded its recommendation on the shares to “buy” from “hold.”

Intercell Slides

Intercell AG slipped 4.3 percent to 25.70 euros after the Austrian biotechnology company said it will probably post a loss this year because of disappointing sales of the Ixiaro vaccine for Japanese encephalitis.

Stocks around the world are falling at the fastest rate since the worst of the credit crisis on concern central banks will start raising rates, a signal that triggered the biggest rallies over the past three decades.

Benchmark indexes from New York to Tokyo to Frankfurt have lost an average of 4.4 percent since Oct. 19 on speculation policy makers will curtail stimulus measures before the global economy revives. History shows stocks have climbed 92 percent of the time in the six months before government borrowing costs began the biggest increases, data compiled by Bloomberg show.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

Last Updated: November 9, 2009 12:49 EST