June 4 (Bloomberg) -- European stocks advanced before today’s interest-rate decision from the European Central Bank as higher oil prices lifted energy producers. U.S. index futures gained, while Asian shares fell for the first time in five days.

J Sainsbury Plc, the U.K.’s third-largest supermarket chain, climbed 2.4 percent after Morgan Stanley recommended the stock. Total SA, Europe’s biggest oil refiner, led energy shares higher. Swedbank AB rose 3.4 percent after SEB Enskilda lifted its recommendation on the stock.

Europe’s Dow Jones Stoxx 600 Index added 0.3 percent to 210.57 at 12:07 p.m. in London after earlier falling 0.1 percent. The gauge slid the most in three weeks yesterday as investors speculated a three-month rally has outpaced the outlook for earnings. The Stoxx 600 was valued at 25.5 times the earnings of its companies on June 2, the most expensive level since 2004.

The measure has gained 34 percent from a 12-year low on March 9 after optimism that government action will help to end the first global recession since World War II.

“What we were celebrating from March 9 is the world isn’t coming to an end,” said Michael Sieghart, co-head of equities at DWS Investment GmbH in Frankfurt, which oversees $374 billion. “We’ve seen data points improve and we’ve seen some green shoots. Nevertheless, we shouldn’t expect the nature of the recovery to be very strong.”

BOE, ECB Decisions

The Bank of England today maintained its benchmark interest rate at a record low and kept up its plan to buy bonds with newly created money. The ECB will also keep its key rate unchanged, according to 52 of 54 economists in a Bloomberg survey. Even as policy makers bicker over the extent of asset purchases, the ECB is unlikely to signal it will buy more than the 60 billion euros ($85 billion) of covered bonds it has already announced, economists said.

U.K. house prices rose in May by 2.6 percent from the previous month, Lloyds Banking Group’s Halifax division said today. Economists surveyed by Bloomberg had forecast a 1 percent decline. In the U.S., a report today may show that initial jobless claims fell to 620,000 last week from 623,000, according to economists’ estimates. Data on May employment will be released tomorrow.

“All eyes will be on the initial jobless claims before tomorrow’s key non-farm payroll and unemployment numbers,” Matthew Buckland, a trader at CMC Markets in London, wrote.

U.S. stocks fell for the first time in five days yesterday as a private report showed the nation lost more jobs than forecast, commodities slid and the Standard & Poor’s 500 Index traded at the most expensive in eight months. S&P 500 futures gained 0.3 percent today.

Asian Stocks Slip

The MSCI Asia Pacific Index fell 1.6 percent after a report yesterday showed the U.S. service sector improved less than estimated.

Sainsbury advanced 2.4 percent to 324 pence. Morgan Stanley lifted its recommendation on the stock to “overweight” from “equal weight.”

Total added 1.4 percent to 41.22 euros. Crude oil rose as Goldman Sachs Group Inc. said prices may reach $85 this year and the dollar dropped, increasing the allure of commodities as a currency hedge. Goldman Sachs increased its forecast for West Texas Intermediate crude for the end of 2009 to $85 a barrel from $65 and predicted further gains next year as demand recovers.

BP Plc added 1.4 percent to 525.5 pence after Exane BNP Paribas upgraded Europe’s second-biggest oil company to “outperform” from “neutral,” citing “a period of share price weakness” and “a compelling, safe dividend yield.”

Swedbank Advances

Swedbank advanced 3.4 percent to 39.30 kronor. SEB Enskilda raised its recommendation on the shares to “hold” from “sell.” The stock’s 30 percent decline since the start of last week makes its valuation “less demanding,” the analysts wrote.

ThyssenKrupp AG gained 3.8 percent to 20.32 euros. Bank of America Corp. raised its recommendation on Germany’s largest steelmaker to “buy” from “neutral” and added the stock to its “Europe 1” list.

Intercell AG jumped 8.4 percent to 24.40 euros. The Austrian biotechnology company was rated “buy” with a price estimate of 36 euros in new coverage at Deutsche Bank AG.

Sulzer AG surged 8.3 percent to 77.5 Swiss francs. The world’s second-biggest maker of pumps nominated former ABB Ltd. Chief Executive Officer Juergen Dormann to the board after shareholders ousted Ulf Berg in April.

Genmab Falls

Genmab A/S dropped 4.7 percent to 199.5 kroner. The Danish drugmaker said it must suspend enrollment in two studies of a new medicine for head and neck cancer while U.S. regulators review safety data.

A gauge of basic-resources shares fell 1.8 percent, the most among the 19 industry groups in the Stoxx 600, as copper, lead and nickel retreated in London. Vedanta Resources Plc, the largest copper producer in India, sank 3.5 percent to 1,527 pence. BHP Billiton Ltd., the world’s biggest mining company, slipped 2.1 percent to 1,462 pence.

European companies will reduce dividends over the next 18 months at the fastest rate since at least 1999, even as analysts increase earnings forecasts, trading in futures shows.

Dow Jones Euro Stoxx 50 Index Dividend Futures that allow investors to speculate on payouts show companies will lower their dividends by 28 percent this year compared with 2008. In 2010, cuts will amount to 32 percent, according to data compiled by the Eurex exchange and Bloomberg.

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

Last Updated: June 4, 2009 07:08 EDT