Stocks Rise in Europe, Asia; Nestle, Vedanta, Nintendo Advance

Feb. 21 (Bloomberg) -- Stocks gained in Europe and Asia on higher profits, rising commodities prices and growing optimism that demand from emerging markets will counter a U.S. economic slowdown. U.S. index futures advanced.

Nestle SA rose in Zurich after profit beat analysts' estimates. Vedanta Resources Plc and BHP Billiton Ltd. jumped in London as zinc and copper surged and gold reached a record. Nintendo Co. climbed in Japan after saying its Wii video-game console will outsell Microsoft Corp.'s Xbox 360 in the U.S. Research In Motion Ltd. rose in Germany after the maker of the BlackBerry device said subscriber gains will beat forecasts.

The MSCI World Index added 1 percent to 1,458.29 at 1:05 p.m. in London, with all 10 industry groups climbing. Futures on the Standard & Poor's 500 Index increased 0.4 percent. About five stocks advanced for every one that declined in Europe's Dow Jones Stoxx 600 Index, while more than two stocks rose for each that fell in Asia's regional benchmark.

``We're seeing some reassuring earnings,'' Alexandre Iatrides, who helps oversee about $5.9 billion at Richelieu Finance in Paris, said in a Bloomberg TV interview. Some ``companies aren't really feeling an impact from the credit crisis,'' he said.

Stocks extended gains after the European Commission's forecast for economic growth this year was more than economists estimated. In a separate report, U.K. retail sales rose the most in 11 months in January, beating predictions, the country's Office for National Statistics said today.

Some Relief

``There have been a lot of worries in the market and this better-than-expected forecast seems to give relief,'' said Sandro Baechli, an equity strategist at Clariden Leu in Zurich, referring to the commission's growth outlook for the euro region. Clariden Leu is a subsidiary of Credit Suisse Group.

Europe's Stoxx 600 added 1.5 percent. Germany's DAX increased 1.3 percent, as did France's CAC 40. The U.K.'s FTSE 100 climbed 1.5 percent. The MSCI Asia Pacific Index added 1.7 percent.

Nestle rose 5.8 percent to 493.25 Swiss francs. The company said second-half profit climbed 14 percent to 5.73 billion francs ($5.2 billion) after passing on higher commodity costs to consumers by increasing prices of Dreyer's ice cream and Nescafe instant coffee.

That beat the 5.33 billion-franc average estimate of 13 analysts in a Bloomberg survey. Revenue increased 10 percent.

Nintendo, which counts the Americas as its biggest market, advanced 4.1 percent to 53,300 yen, the highest since Jan. 23. The Wii will surpass the Xbox 360 in total U.S. sales by June, helped by video-game titles including ``Super Smash Bros. Brawl,'' Nintendo of America President Reggie Fils-Aime said.

Qantas, Vedanta

Qantas Airways Ltd., Australia's biggest airline, gained 2.3 percent to A$4.45 after first-half profit doubled to a record as it cut fuel costs and economic growth boosted passenger traffic.

Vedanta, India's largest copper and zinc producer, climbed 3.7 percent to 2,300 pence. BHP Billiton Ltd., the world's largest mining company, increased 3.8 percent to 1,675 pence.

Zinc and copper gained, while gold futures for April delivery traded at $945.10 in New York after reaching a record $949.20 yesterday.

``Higher commodity prices are likely to continue as demand from Asia is still pretty strong,'' said David Bradbury, who helps manage about $6 billion at Canada Life Ltd. in London. ``We are certainly not negative on the sector and have a reasonable weighting.''

Xstrata Plc rallied 4.5 percent to 4,125 pence after the Estado de S. Paulo newspaper reported Cia. Vale do Rio Doce has increased its offer to buy the copper producer to $89.3 billion in cash and stock. Estado cited market speculation.

Possible Bid

The company is holding informal negotiations and analysts bet an informal proposal may be made as early as this week, Estado said. Xstrata spokeswomen Claire Divver and Pam Bell didn't immediately return calls to their London office and mobile phones seeking comment.

Research In Motion rallied $6.08 to $103.99 in Germany after the company said fourth-quarter subscriber gains probably will be as much as 20 percent higher than the 1.82 million forecast in December.

The total subscriber base will be about 14 million by the close of the quarter ending March 1, the company said.

Cisco Systems Inc. rallied 59 cents to $23.20 in Germany after Citigroup Inc. upgraded the world's largest maker of computer-networking equipment to ``buy'' from ``hold,'' citing ``attractive'' valuations and ``more reasonable'' earnings expectations.

Saint-Gobain

Cie. de Saint-Gobain SA advanced 3.5 percent to 53.75 euros after JPMorgan Chase & Co. raised its recommendation for Europe's biggest supplier of building materials to ``overweight'' from ``neutral.''

The brokerage also upgraded shares of Buzzi Unicem SpA, Italy's second-largest cement producer, to ``overweight'' from ``neutral.'' The stock rose 4.1 percent to 16.91 euros.

Alliance & Leicester Plc dropped 3.2 percent to 476.5 pence, extending yesterday's 6.8 percent retreat. Morgan Stanley downgraded the bank to ``underweight'' from ``equal-weight,'' citing concern the company will cut its dividend.

Morgan Stanley slashed its 2008 earnings per share estimate for the U.K. company by 22 percent and said Alliance & Leicester may reduce its dividend by as much as 50 percent. The brokerage cut its price estimate for the stock 49 percent to 370 pence.

Reed Elsevier Plc rallied 9.9 percent to 641.5 pence. The owner of the LexisNexis database offered to buy ChoicePoint Inc. for a total of $4.1 billion in cash. The deal comprises an equity value of $3.5 billion and the assumption of about $600 million of net debt, the company said today.

Deutsche Postbank

Deutsche Postbank AG increased 2 percent to 64.66 euros after the Financial Times Deutschland reported Allianz SE plans to make a bid for Germany's largest consumer bank by clients.

Postbank has been in talks with Allianz, Deutsche Bank AG and ING Groep NV over a possible sale, the newspaper reported on its Web site today, citing people familiar with the matter.

Allianz spokesman Eduard Stipic and Postbank spokesman Hartmut Schlegel declined to comment.

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

To contact the editor responsible for this story: Daniel Hauck at dhauck1@bloomberg.net.