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Dubai: Stocks rebounded in Europe and Asia and US index futures rose after International Business Machines Corp. reaffirmed its profit forecast and investors speculated the worst five-day rout since 1987 was overdone.
IBM, the world's biggest computer-services company, jumped 6.2 per cent in Germany after earnings topped analysts' estimates. Cap Gemini SA, Europe's largest computer-services company, rallied 4.3 per cent. BHP Billiton Ltd. led mining shares higher, jumping 4 per cent as metals gained in London. Industrial & Commercial Bank of China Ltd. surged 6.1 per cent and South Korea's LG Electronics Inc. climbed 4.9 per cent.
The MSCI World Index added 0.9 per cent to 1,012.24 at 8:45 a.m. in London. The index slumped 15 per cent in the previous five days, the biggest drop since October 1987. Standard & Poor's 500 Index futures 2.1 per cent. Europe's Dow Jones Stoxx 600 Index advanced 2.2 per cent, while the MSCI Asia Pacific Index rose 0.7 per cent.
"IBM's statement provides some reassurance to investors," said Jesper Kruger, a fund manager in Copenhagen at ATP, which has about $64 billion. "Not only does IBM have a broad exposure across the tech sector, but financial services makes up around 28 per cent of its business."
Four Asian central banks lowered interest rates to limit the economic impact of the worst financial crisis since the Great Depression. The cuts followed coordinated rate reductions on Wednesday by the Federal Reserve, European Central Bank, Bank of England, Bank of Canada and Sweden's Riksbank.
The yen fell against the dollar for the first time this month on Thursday, while Treasuries fell.
Valuations
The sell-off in equities left the MSCI World valued at 12.01 times the reported earnings of companies in the index on Wednesday, the cheapest since at least 1995. Europe's Stoxx 600 was valued at 9.44 times profit, the cheapest since Bloomberg began compiling the data in January 2002. The S&P 500 traded at 18.82 times earnings.
"There's a little bit of bottom-fishing going on with share prices having come off so much," said Oliver Stevens, head of dealing at IG Markets in Melbourne.
IBM climbed $5.65 to $96.20 after saying profit for the year will be at least $8.75 a share, reaffirming a previous forecast. Earnings last quarter increased to $2.05 a share, excluding some items, the company said. That topped the $2.01 average estimate of analysts in a Bloomberg survey.
Cap Gemini climbed 1.09 euros to 26.33 euros. Atos Origin SA, France's second-largest computer-services provider, rose 2.6 per cent to 25.50 euros. Logica Plc, the Anglo-Dutch computer- services provider, advanced 1.5 per cent to 86.5 pence.
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