July 21 (Bloomberg) -- European stocks completed the longest stretch of daily gains since May as Bank of America Corp.'s better-than-estimated earnings bolstered confidence in financial firms and higher metal prices lifted commodity producers.

Royal Bank of Scotland Group Plc, the U.K.'s second-largest bank, and UBS AG, the European bank hardest hit by the subprime contagion, rallied to the highest in at least two weeks. BHP Billiton Ltd. and Rio Tinto Group led a rebound in mining shares. Syngenta AG jumped after Exane BNP Paribas recommended the world's largest maker of agricultural chemicals.

The Dow Jones Stoxx 600 Index added 0.6 percent to 282.36, the fourth straight day of gains. Financial firms last week led the region's shares to the first weekly advance since May after Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. posted earnings that beat analysts' estimates.

``U.S. banks have reported results that are better than market expectations,'' said Ed Wallace, who helps oversee $4 billion in global equities at Gartmore Investment Management in London. ``That is bringing some investors back into financials. The commodity bulls are rallying'' around mining companies.

About $13 trillion has been wiped off the value of global equities since October as financial companies notched up more than $447 billion in credit-related losses. Banks, the world's worst-performing stocks this year, have raised more than $331 billion to offset losses stemming from the financial-market turmoil and slowdown in lending.

Earnings Outlook

The Stoxx 600 has dropped 23 percent in 2008, leaving the index valued at 11.3 times the earnings of its companies, near the cheapest since at least 2002, according to data compiled by Bloomberg. Analysts estimate profit for companies in the regional index will fall 2.4 percent in 2008, Bloomberg data show. That's down from 11 percent growth predicted at the start of the year.

National benchmark indexes rose in all 18 western European markets except Spain. The U.K.'s FTSE 100 climbed 0.5 percent. France's CAC 40 added 0.7 percent, as did Germany's DAX.

Royal Bank of Scotland advanced 2.7 percent to 203 pence, and UBS increased 2.2 percent to 22.46 Swiss francs.

Bank of America, the biggest U.S. consumer bank and home lender, today said second-quarter profit fell less than analysts estimated and predicted the purchase of Countrywide Financial Corp. will add to earnings this year.

BHP, the world's largest mining company, gained 2.9 percent to 1,646 pence. Rio Tinto, the third-biggest, added 3 percent to 5,220 pence.

Metal Prices

Base metals including copper, nickel, tin and zinc rallied on the London Metal Exchange. Aluminum rose from a one-month low in Asia after crude oil rebounded.

``I still believe in the commodity super cycle, although it is going to be a rocky ride,'' said Richard Robinson, who helps oversee $1.8 billion at Jersey-based Ashburton Ltd. ``We are now starting to see people switch back into the commodities sectors.''

The Stoxx 600 Basic Resources Index was the worst performer last week on concern the global economic slowdown will cut demand for metals. The index closed last week at a four-month low.

Syngenta rallied 5.3 percent to 284.75 francs. Exane raised its recommendation for the chemical maker to ``outperform'' from ``neutral,'' citing sales growth in crop protection in the second half of the year.

Yara International ASA, the world's largest fertilizer maker, added 4.8 percent to 360 kroner.

Roche, HBOS

Roche Holding AG retreated 4.8 percent to 171 francs after the world's biggest maker of cancer drugs offered to buy the rest of Genentech Inc., the U.S. biotechnology company, for $43.7 billion.

Genentech investors would get $89 a share in cash, 8.8 percent more than the July 18 closing price, Roche said. The company already owns 56 percent of Genentech and markets many of its treatments.

HBOS Plc, the U.K.'s largest mortgage lender, sank 6.2 percent to 264.5 pence after shareholders agreed to buy only 8.3 percent of its 4 billion-pound ($8 billion) rights offer. Shareholders bought 124 million shares at 275 pence apiece.

Morgan Stanley and Dresdner Kleinwort Ltd. will seek buyers for the remaining 1.38 billion shares until 4:30 p.m. on July 22, HBOS said.

The Sunday Times said the mortgage lender's offering is expected to be one of the most ``disastrous'' in corporate history, without citing anyone.

Inmarsat, Danisco

Inmarsat Plc declined 9 percent to 466.5 pence after the U.K. satellite company that provides communications services said talks with Harbinger Capital Partners about a potential takeover have ended.

Harbinger didn't make an offer for the company or indicate a potential offer price and Inmarsat's board ``has therefore concluded that there is no merit in continuing discussions at this time,'' according to the statement. Danisco A/S surged 11 percent to 313.5 kroner after Borsen reported private-equity firm Apax Partners Worldwide LLP may make an offer for Scandinavia's biggest food-ingredient maker.

The newspaper said it may receive a bid ``within a short time.'' Danisco Chief Executive Officer Thomas Knutzen said today in a telephone interview he hadn't received any approaches.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

Last Updated: July 21, 2008 12:14 EDT