European, Asian shares up; US index futures rise

European and Asian stocks rose, resuming a six-month rally for the MSCI World Index, amid signs government stimulus measures are helping the global economy to recover US futures advanced.

Samsung Electronics Co and STMicroelectronics NV surged more than 3 per cent as chip prices climbed to the highest level in more than a year. Carnival Corp gained 2.7 per cent in London after Bank of America Corp recommended shares of the world’s biggest cruise-line operator. BHP Billiton led mining companies higher as commodities advanced.

The MSCI World added 0.9 per cent at 11.09 am in London. The index has advanced 66 per cent since March 9 as results at companies from HSBC Holdings to GlaxoSmithKline surpassed projections and the German and French economies unexpectedly exited recessions. The gauge is valued at more than 27 times the reported earnings of its companies, the highest level since 2003.

The rally “can run a bit further,” Georgina Taylor, an equity strategist at Legal & General Group in London, which oversees $456 billion worldwide, said in an interview. “We’re positive on equities. There’s evidence of real economic activity starting to increase.”

The Dow Jones Stoxx 600 Index of European equities gained 0.9 per cent today as all 19 industry groups advanced. Standard & Poor’s 500 Index futures added 0.7 per cent and the MSCI Asia Pacific excluding Japan Index increased 0.9 per cent. Markets in Japan, Malaysia, Indonesia and Pakistan are shut for holidays.

Asian growth
The Asian Development Bank raised its economic growth forecast for the region on strengthening expansion in China, India and Indonesia, and said it’s too early for governments to withdraw stimulus policies. Asia, excluding Japan, will grow 3.9 per cent in 2009, faster than a March estimate of 3.4 per cent, the Manila-based institution said today. Growth may accelerate in 2010 to 6.4 per cent, the bank said.

The Italian government increased its forecast for next year’s economic growth to 0.7 per cent from 0.5 per cent. The economy will shrink 4.8 per cent in 2009, compared with a previous prediction for a contraction of 5.2 per cent, a finance ministry official said today.

The global economy has yet to feel the biggest impact of government-led spending programmes to stimulate demand, according to UK Prime Minister Gordon Brown, who yesterday reiterated concerns about removing them too early.

‘Safeguard a recovery’
“The stimulus that we have still got to give the world economy is greater than the stimulus we have already had,” Brown told reporters in London before his departure today for the Group of 20 (G-20) meeting in Pittsburgh. “What we want to do is safeguard a recovery from a recession we feared would develop into a depression.”

Global leaders meet this week seeking to deliver the broadest financial regulation overhaul since the 1930s, potentially threatening profits and stock prices of banks.

The G-20 convenes in Pittsburgh on September 24-25 to discuss forcing banks to curb leverage, hold more equity capital and keep a greater pool of assets that can be easily traded.

Stocks have rallied since March as the G-20 committed about $12 trillion to revive growth and the Federal Reserve kept overnight borrowing costs near zero to unlock credit markets. The collapse of sub-prime mortgages spurred $1.6 trillion in writedowns and losses at the world’s biggest financial firms.

Fed Chairman Ben S Bernanke’s efforts to stoke a US economic recovery may be undermined by the central bank’s other goal of restoring the banking system to health.

Fed meeting
The Federal Open Market Committee, at the conclusion tomorrow of a two-day meeting, will probably maintain its assessment that “tight” bank credit is impeding growth. Samsung Electronics, the world’s largest computer-memory chip maker, gained 3.4 per cent to 825,000 won in Seoul. The price of the benchmark computer-memory chip climbed 1.1 per cent Monday to the highest level since August 2008, according to Dramexchange Technology.

Separately, Citigroup Inc. raised its price estimate to 1,030,000 won from 900,000 won on expectations earnings will benefit from growing demand for computer-memory chips.

STMicroelectronics, Europe’s biggest semiconductor maker, added 3 per cent to €6.74 and Infineon Technologies, the region’s second-largest, gained 1.3 per cent to €3.64.