Nov. 10 (Bloomberg) -- European stocks advanced for a second day after China unveiled a $586 billion plan to stimulate the economy and world leaders urged more cuts in interest rates.

BHP Billiton Ltd. climbed 11 percent and Rio Tinto Group jumped 8.6 percent as copper rallied. Deutsche Post AG added 6.9 percent after Europe's biggest mail carrier confirmed its full- year profit target.

China's plan ``is very encouraging,'' said Virginie Maisonneuve who oversees $19 billion as head of global equities at Schroder Investment Management in London. ``We need a speedy implementation. From a sentiment standpoint and in terms of planning ahead, this will create a positive shift.'' She spoke in a Bloomberg Television interview.

The Dow Jones Stoxx 600 Index rose 0.6 percent to 220.96, trimming this year's drop to 39 percent. The International Monetary Fund predicts global growth will slow to 2.2 percent in 2009 from 3.7 percent this year, meaning a world recession under the fund's informal definition -- growth of 3 percent or less.

National benchmarks gained in all 18 western European markets except Austria and Spain. The U.K.'s FTSE 100 jumped 0.9 percent with Cable & Wireless Plc advancing. Germany's DAX added 1.8 percent, while France's CAC 40 increased 1.1 percent.

The government of China, the world's fourth-largest economy, announced infrastructure spending, tax deductions and farming subsidies. The central bank has already cut interest rates three times in two months, joining policy makers from Washington and Tokyo to Frankfurt and London in efforts to lower borrowing costs and inject cash to avoid recession.

Bank Shares Fall

Declines in financial shares limited the Stoxx 600's advance as Swedish investment bank D. Carnegie & Co. AB was seized by the country's national debt office, Banco Santander SA said it plans to raise 7.2 billion euros ($9.2 billion) in a rights offer and Goldman Sachs Group Inc. of the U.S. had its share-price target cut by Barclays Capital.

Retailers also dropped after Tesco Plc, Britain's largest retailer, reported deteriorating sales in China and South Korea, while Circuit City Stores Inc., a U.S. electronics chain, filed for bankruptcy.

The Group of 20 nations said yesterday that it is prepared to act ``urgently'' to bolster growth and called on governments to cut interest rates and raise spending as the world's leading industrialized economies battle the economic slump.

China Growth

The U.S. economy, the world's biggest, is forecast to expand 1.6 percent this year, down from 2 percent growth in 2007, according to economists' estimates compiled by Bloomberg News. China's will grow 9.9 percent in 2008, down from 11.9 percent, the data show. The IMF last week predicted the economies of the U.S., Japan and the euro zone will all shrink next year.

U.S. President-elect Barack Obama doesn't plan to name a Treasury secretary or fill other top positions on his economic team this week, people familiar with the matter said, as he tries to keep from being drawn into Bush administration decisions he may disagree with.

More than $28 trillion has been erased from the value of global equity markets as credit losses and writedowns totaled $690 billion in the worst financial crisis since the Great Depression. The Stoxx 600 is headed for its worst year on record.

``With China accounting for roughly 27 percent of global economic growth last year, this package should certainly help in averting a global recession,'' said Ben Potter, research analyst at IG Markets in Melbourne.

Money Markets

Money market rates in Europe fell today indicating measures taken by authorities across the globe are unlocking credit markets. The London interbank offered rate, or Libor, the rate banks charge each other for three-month loans in dollars, slid almost 6 basis points to 2.24 percent, according to British Bankers' Association. It was the 21st consecutive decline and the lowest level in four years.

BHP Billiton, the world's biggest mining company, rose 11 percent to 1,123 pence. Rio Tinto, the world's third-largest mining company, added 8.6 percent to 2,844 pence.

Copper jumped 3.5 percent on the London Metal Exchange.

ArcelorMittal, the world's largest steelmaker, climbed 6 percent to 18.54 euros.

Deutsche Post rose 6.9 percent to 10 euros after saying it plans to widen workforce cuts by 9,500 jobs. Third-quarter net income more than doubled to 805 million euros ($1.04 billion) from 350 million euros.

Cable & Wireless, the U.K.'s second-biggest phone company, gained 5.4 percent to 142 pence. Earnings before interest, taxes, depreciation and amortization are now predicted to reach at least 780 million pounds ($1.2 billion) in the 12 months ending March 31, 2009. The previous forecast was for Ebitda of 702 million pounds to 725 million pounds.

Santander, Goldman

Crucell NV rose 6.9 percent to 10.90 euros after its experimental AIDS vaccine kept six monkeys from getting an animal equivalent of the disease. Crucell is a biotechnology company that markets vaccines and antibodies to treat infectious diseases such as influenza, hepatitis A and B, and typhoid fever.

Santander fell 5 percent to 7.92 euros. The bank will sell 1.6 billion new shares at 4.5 euros each less than two weeks after Spain's biggest bank said it had no need to raise capital.

Goldman may lose $2.50 a share in the fourth quarter because the firm's private equity business has been damaged by the stock market's sell-off, according to Barclays.

Tesco lost 5.9 percent to 323 pence. Revenue growth at Chinese outlets open at least a year was 8 percent in the 10 weeks to Nov. 1, below the first half's 14 percent pace, the company said today. Sales fell 2 percent on that basis in South Korea after being unchanged in the first half.

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

Last Updated: November 10, 2008 12:08 EST