By Adam Haigh July 6 (Bloomberg) -- European stocks gained, ending the longest losing streak in a year for the Stoxx Europe 600 Index, on speculation the decline in equities has overrun the outlook for company earnings. Asian shares and U.S. index futures rose. BHP Billiton Ltd. and Rio Tinto Group led basic resource shares higher. Balfour Beatty Plc jumped 3.3 percent after Britain’s biggest builder said it expects its order book to increase. BP Plc rose 3.6 percent as Royal Bank of Scotland Group Plc recommended the shares. The Stoxx 600 climbed 1.6 percent to 240.44 at 9:32 a.m. in London, the biggest gain in almost a month. The gauge had fallen for five straight days to the lowest level since May 25 as disappointing economic data from China and the U.S. fanned concern that the global recovery is faltering. The decline left the gauge trading at 11 times estimated earnings, the lowest valuation in more than a year, according to Bloomberg data. “Hardly any earnings growth is currently priced in by markets,” Bill O’Neill, Merrill Lynch Wealth Management’s chief investment officer for Europe, the Middle East and Africa, said in an e-mail. “We still see value” in European equities. O’Neill helps manage about $1.4 trillion and forecast a 10 percent gain in European stocks by year end on June 22. The MSCI Asia Pacific Index rose 1.4 percent today. Futures on the Standard & Poor’s 500 Index gained 0.8 percent before U.S. trading resumes following the Independence Day holiday. U.S. Economy Service industries in the U.S. expanded in June at a slower pace, indicating the world’s largest economy started to cool entering the second half, economists said before a report due at 10 a.m. in New York today. Analysts are raising earnings estimates for U.S. companies at the fastest rate since at least 2004 just as stocks post the biggest losses in 16 months. Profit for S&P 500 companies will jump 34 percent in 2010, compared with a projected gain of 27 percent on March 29, according to estimates compiled by Bloomberg. The revision, the most during any quarter in at least six years, came as lower-than-forecast home sales, manufacturing and private-sector job growth sent the benchmark gauge for American equities down 16 percent since April 23. BHP Billiton, the world’s biggest mining company, climbed 3.3 percent to 1,740.5 pence. Rio Tinto gained 3.8 percent to 2,990 pence. Basic resource shares led gains among the 19 industry groups in the Stoxx 600 as copper advanced for a third day in London. Balfour Beatty Balfour Beatty advanced 3.3 percent to 244.3 pence. The U.K. builder expects its order book to be ahead of the 14.1 billion pounds ($21 billion) reported in December even as it sees some “uncertainties.” Rival Persimmon Plc climbed 5.7 percent to 368.5 pence, the most in two months. Sales in the first six months of the year rose 26 percent as the housing market recovery enabled the company to increase prices. BP, the oil company grappling to stop a leak that has caused the biggest oil spill in U.S. history, rose 3.6 percent to 345.3 pence. RBS upgraded the shares to “buy” from “hold,” saying the “pessimistic view on the probable costs of the Macondo spill is currently discounted” in the share price. BP “is a good buy for anyone who has the guts to take the chance,” Shokri Ghanem, chairman of the Libya National Oil Corp., said in a Bloomberg television interview. “The price of the shares are very low. It gives a good opportunity to invest.” Petroplus, Tullow Petroplus Holdings AG increased 6.1 percent to 15.96 Swiss francs. Europe’s largest independent refiner was rated “trading buy” at Credit Suisse Group AG, which increased its price estimate to 21.5 francs from 20 francs. Tullow Oil Plc gained 3.2 percent to 1,074 pence after saying the Ugandan government is likely to approve its purchase of assets from Heritage Oil Plc “imminently.” EasyJet Plc gained 2.2 percent to 400.7 pence. Europe’s second-biggest discount airline said its passenger numbers rose 9.4 percent to 4.5 million in June. Debenhams Plc, the U.K.’s second-largest department-store company, advanced 4.1 percent to 59.55 pence, rising for a fourth day. UBS AG upgraded the stock to “buy” from “neutral,” calling the shares “cheap, cheap, cheap.” The retailer’s third quarter is “likely to be the low point and we expect management to increase focus on delivering market share gains and positive like-for-like” sales, UBS analyst Adam Cochrane wrote in a report today. Zodiac Aerospace SA surged 7.2 percent to 39.53 euros. Europe’s biggest maker of airplane seats was upgraded to “buy” from “hold” at Societe Generale SA. --With assistance from Maryam Nemazee in London. Editors: Andrew Rummer, David Merritt. To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.

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