European stocks gained for the first time in six days, rebounding from a three-month low, as investors speculated losses following radiation leaks from a Japanese nuclear plant were overdone. Japan’s shares rallied. Munich Re climbed 2.5 percent as BofA Merrill Lynch Global Research upgraded the world’s biggest reinsurer. Zodiac Aerospace surged 4.6 percent as first-half revenue increased. Sonova Holding AG (SOON) plunged the most in four years after the Swiss hearing-aid maker cut its forecasts. The Stoxx Europe 600 Index rose 0.4 percent to 267.48 at 8:31 a.m. in London. The gauge had retreated 8.5 percent from this year’s high in February through yesterday as last week’s Japanese earthquake and ensuing nuclear disaster added to concern that revolts in the Middle East and North Africa will further disrupt oil supplies. The drop pushed the measure’s valuation to the lowest level since April 2009 relative to estimated company earnings. The market’s direction “is heavily dependent on what’s happening in Japan,” said Markus Steinbeis, head of equity portfolio management at the Unterfoehring, Germany-based unit of Pioneer Investments KGmbH, which oversees about $221 billion globally. “We’re only guessing right now and while short-term investors may be buying into the market, longer-term investors are still a bit more cautious.” Japanese Stocks Japan’s Nikkei 225 (NKY) Stock Average jumped 5.7 percent on speculation a selloff that drove valuations to a 28-month low was excessive even as the country battles to prevent a nuclear disaster after its strongest earthquake. The MSCI Asia Pacific Index climbed 3.1 percent and Standard & Poor’s 500 Index futures expiring in June added 0.1 percent. A fire and aftershocks struck the crippled Fukushima Dai- Ichi power plant today, as officials battling to prevent a nuclear meltdown said fuel rods at two reactors may have been damaged. Clouds of white smoke or steam started rising from reactor buildings at 10 a.m. and moving westward inland. Japan Chief Cabinet Secretary Yukio Edano said radiation levels at the plant rose at that time but have since fallen. The declines in European equities are “presenting some solid buying opportunities for the longer-term investor,” said Peter Stanhope, associate director at IG Markets in Melbourne. Even so, “news of another fire at the Fukushima Dai-Ichi nuclear power station in Japan seems likely to ensure that equity markets remain volatile as the week progresses.” Portugal Downgrade Portugal’s debt rating was cut by Moody’s Investors Service, which cited a weaker outlook for economic growth, risks to the government’s deficit-reduction plans and a possible need to recapitalize banks. The rating was downgraded to A3, four steps from so-called junk status. In the U.S., Federal Reserve officials signaled they’re unlikely to expand a $600-billion bond purchase plan as the recovery picks up steam and the threat that inflation will fall too low begins to wane. Reports today may show builders began work on fewer houses in February, while prices paid to producers increased on higher energy costs. Munich Re climbed 2.5 percent to 107.90 euros. The stock was raised to “neutral” from “underperform” at BofA Merrill Lynch, which said declines in European insurance shares following the Japanese temblor have been overdone. Zodiac Aerospace (ZC) rallied 4.6 percent to 49.11 euros. Europe’s biggest maker of aircraft seats said first-half revenue rose to 1.31 billion euros ($1.8 billion) from 966 million euros a year earlier. Bollore (BOL) SA gained 2.4 percent to 115.95 euros after saying net income more than tripled in 2010. The French holding company with stakes in freight, transport, paper and rubber operations said 2010 net income rose to 317 million euros from 94 million euros a year earlier. Sonova tumbled 13 percent to 100.2 Swiss francs for the biggest drop in the Stoxx 600. The company said it’s expecting sales of around 1.6 billion francs ($1.7 billion) in fiscal 2011. To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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