European Stocks May Rise; Aviva, UBS, Glaxo, BHP May Gain

July 31 (Bloomberg) -- European stocks may advance for the first time in six days on speculation shares have become cheap relative to prospects for earnings growth.

Aviva Plc, HSBC Holdings Plc and UBS AG might lead financial stocks higher after their U.S.-traded securities gained. GlaxoSmithKline Plc, the region's second-largest drugmaker, may rise after a panel of medical specialists said its Avandia drug should remain on the U.S. market. BHP Billiton Ltd. and Rio Tinto Group gained in Australia on higher copper prices.

U.S. stocks rebounded yesterday from the worst two-day slide since 2003 as Wall Street's biggest securities firms said last week's sell-off made banks, homebuilders and retailers relative bargains. Asian stocks advanced today.

``Wall Street broke its losing run last night and this change of sentiment looks set to buoy the major European stocks,'' said Matthew Buckland, a trader at CMC Markets Plc in London. ``In the short term it looks as if markets are stabilizing.''

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the countries using the euro, rose 42 to 4303 at 7:34 a.m. in London. The U.K.'s FTSE 100 Index may advance 41 to 6247, according to IG Markets, a betting firm.

The Stoxx 600 is valued at 13.26 times estimated earnings, compared with a multiple of 15.52 for the U.S. Standard & Poor's 500 Index. The Stoxx 600 has gained 1.9 percent so far this year.

American depositary receipts of Aviva, the U.K.'s biggest insurer, rose 3.4 percent from the stock's close in London. ADRs of HSBC, Europe's largest bank, climbed 1.8 percent from the close. UBS, the world's biggest money manager, gained 0.7 percent from the Zurich close.

Glaxo's ADRs

Glaxo's ADRs rose as much as 7.1 percent after regular trading on the New York Stock Exchange. The company's diabetes pill Avandia should stay on the market with new heart-attack warnings, a panel of U.S. advisers said yesterday.

The medical specialists voted overwhelmingly at a U.S. Food and Drug Administration advisory meeting yesterday that the drug increases the risk of heart attacks. The panel voted that the risk wasn't great enough to pull the drug from the market.

BHP Billiton, the world's biggest mining company, rose 0.6 percent in Australia today. Rio Tinto, the third-largest, gained 1.4 percent.

Copper futures in Asia rose after workers at Southern Copper Corp., the world's fifth-largest producer of the metal, began a strike at three of the company's Mexican mines to demand wage increases. Aluminum, lead and zinc also gained.

Alcatel-Lucent

Alcatel-Lucent, the world's biggest supplier of telecommunications equipment, may drop. The company formed after Alcatel SA's Nov. 30 purchase of Lucent Technologies Inc. reported a second-quarter net loss of 586 million euros ($803 million) on costs related to the merger, almost twice the 275 million-euro median estimate of four analysts surveyed by Bloomberg News.

MAN AG, Europe's third-largest truckmaker, rose as much as 2.8 percent in pre-market trading at L&S Wertpapierhandel AG in Dusseldorf, Germany. The company raised its full-year forecast for orders, sales and return on sales. MAN also reported second-quarter net income of 440 million euros, missing the 606 million-euro median of seven analyst estimates compiled by Bloomberg News.

Lloyds TSB Group Plc may gain. The U.K.'s largest provider of unsecured consumer loans said first-half net income rose 27 percent to 1.54 billion pounds ($3.1 billion), buoyed by insurance sales and corporate lending. That beat the 1.38 billion-pound median estimate of seven analysts surveyed by Bloomberg News.

Volkswagen, Ryanair

Volkswagen AG gained as much as 1.4 percent in pre-market trading at L&S after Citigroup Inc. raised its recommendation for shares of Europe's largest carmaker to ``hold'' from ``sell.''

Ryanair Holdings Plc may advance. Europe's biggest discount airline said first-quarter net income rose 20 percent to 138.9 million euros, beating the 125 million-euro median estimate of nine analysts surveyed by Bloomberg News.

Groupe Danone SA may decline. The yogurt maker that's buying baby-food maker Royal Numico NV said yesterday after the close first-half profit rose 6.8 percent to 656 million euros as yogurt consumption grew in Russia and Brazil. That missed the 671 million euros estimated by 10 analysts in a Bloomberg survey.

ASM International NV may be active. Europe's second-largest semiconductor-equipment maker said yesterday second-quarter profit fell 14 percent to 14.9 million euros after it bought back convertible notes.

Agfa-Gevaert NV may be active. The region's largest maker of health-care information technology has delayed its planned split into three separate units until next year after second-quarter profit fell.

To contact the reporter on this story: Andreas Hippin in Frankfurt at ahippin@bloomberg.net.