Life Insurance

Oct. 20 (Bloomberg) -- European stocks rallied, rebounding from their worst tumble since the London terrorist bombings in July, as SAP AG and Schneider Electric AG raised earnings forecasts and Nestle SA's sales exceeded analysts' estimates.

Paladin Resources Plc jumped 28 percent after Talisman Energy Inc. agreed to buy the U.K. oil company. Total SA and Royal Dutch Shell Plc gained after Lehman Brothers Holdings Inc. raised the recommendation on the stocks.

The Dow Jones Stoxx 600 Index added 1.2 percent to 286.55 as of 11:42 a.m. in London as all 18 industry groups rose. The Stoxx 50 increased 1.2 percent, and the Euro Stoxx 50, a gauge for the 12 countries using the euro, also added 1.2 percent. Indexes pared gains after Nokia Oyj reported earnings.

National indexes advanced in all 18 western European markets except Iceland. Germany's DAX Index gained 1.2 percent as did France's CAC 40 Index. The U.K.'s FTSE 100 Index added 0.9 percent.

European benchmarks followed gains in the U.S. The Standard & Poor's 500 Index yesterday had its biggest advance in six months after better-than-expected profits from Altria Group Inc., JPMorgan Chase & Co. and Yahoo! Inc.

SAP, the world's largest maker of business-management software, rose 3.6 percent to 147.80 euros. The company increased its full-year sales and earnings forecasts after third-quarter profit gained 15 percent. The company expects 2005 license revenue, a key measure of future growth, to gain as much as 14 percent, up from a previous target of as much as 12 percent growth.

Schneider Electric added 3.6 percent to 68.65 euros. The biggest maker of circuit breakers expects operating income to rise 15 to 20 percent this year. That compares with a February forecast for a gain of ``around'' 10 percent and a July target of 15 percent.

Nestle, the biggest food maker, gained 3.3 percent to 377.50 Swiss francs, the biggest jump since March 12. The company reported third-quarter sales rose 9.1 percent to 24.2 billion Swiss francs ($18.7 billion). Analysts were expecting 23.5 billion francs, according to a Bloomberg survey.

Nokia, the biggest maker of mobile-phone handsets, fell 2.4 percent to 13.69 euros. The company reported third-quarter earnings rose 29 percent to 20 cents a share. Profit was forecast at 19 cents a share, according to a Bloomberg survey.

Straumann Holding AG declined the most among stocks on the Stoxx 600 after sales fell short of analysts' expectation. The world's second-largest maker of dental implants said third-quarter sales rose 20 percent to 115.4 million francs as European revenue growth slowed. Sales were forecast at 120.4 million francs, based on a Bloomberg survey. The shares sank 7.4 percent to 300 francs.

Paladin jumped 75.5 pence to 350.5 pence. Talisman, a Canadian oil and gas producer, agreed to buy the company for 1.22 billion pounds ($2.2 billion), gaining assets in the North Sea. The cash offer price of 355 pence a share is 29 percent more than yesterday's close for Paladin.

Cairn Energy Plc, a U.K.-based oil exploration and production company, jumped 8.5 percent to 1,727 pence. Tullow Oil Plc, another U.K.-based oil company, jumped 8.3 pence to 237 pence. The two stocks gained the most in the Stoxx 600.

Total, the third-biggest oil company, and Shell, Europe's second-largest oil company, rose after the stocks were upgraded by analysts at Lehman, which cited the underperformance of the companies' shares.

The Stoxx 600 Oil & Gas Index was the best performer among the broader measure's industry groups, rising 2.2 percent. The subindex for energy stocks, which together with mining companies have led gains in Europe this year, is down 9.3 percent from a record high on Sept. 29.

ABN Amro Holding NV, the biggest Dutch bank, and Societe Generale SA, France's No. 3 lender, gained amid plans to become the first overseas investors to buy a majority stake in a Chinese bank, people involved in the sale talks said.

The banks plan to team up with Chinese partners to make an offer for 51 percent of Guangdong Development Bank, which has $43 billion of assets, said the people, who declined to be identified because talks are confidential. ABN Amro shares climbed 0.5 percent to 19.31 euros, while Societe Generale rose 1.4 percent to 92.35 euros.

Allianz AG advanced 1.2 percent to 114.60 euros. Analysts at Morgan Stanley raised their share-price target for Europe's largest insurer 8.3 percent to 130 euros.

This is cache, read story here