Asian stocks rise

GLOBAL MARKETS

Asian stocks gained, driving a regional benchmark to a two-month high, on expectations the Fed will add to this month's half-percentage point rate cut.

Mizuho Financial Group and National Australia Bank climbed after a decline in US home sales and consumer confidence improved prospects that rates will fall. The Nikkei 225 Stock Average added 0.2 per cent in Japan, whose trade surplus more than tripled in August, and India's Sensitive Index exceeded 17,000 for the first time.

"The housing sales and other data announced in the US did not paint a bright picture, but conversely that produced increased expectations that the Fed will lower interest rates,'' said Mitsushige Akino, who oversees $468 million at Ichiyoshi Investment Management Co in Tokyo. "That's making investors more confident about buying stocks here today.''

Europe

Stocks in Europe advanced, led by banks on speculation the US Federal Reserve will cut interest rates to sustain growth in the world's biggest economy. Standard & Poor's 500 Index futures rallied.

HBOS climbed in Europe after Goldman Sachs & Co added shares of Britain's biggest mortgage bank to its "conviction buy'' list. Northern Rock rose after the UK mortgage lender said it is in takeover discussions.

The Morgan Stanley Capital International World Index added 0.2 per cent to 1,612.58, while S&P 500 futures advanced 0.4 per cent to 1,534.40 as of 11:17 am in London. Banks are the worst performing industry in the MSCI World this year and the only sub-index among 10 to drop.

US

US stock-index futures rose on speculation the US Federal Reserve will cut interest rates to help the economy ride out a slump in home sales and consumer confidence.

Shares of General Motors Corp advanced in Europe after the carmaker reached a tentative contract agreement with the United Auto Workers. Red Hat gained after it posted sales that beat analysts' expectations. Dow Jones Industrial Average futures gained 46 to 13,914 and Nasdaq 100 Index futures increased 9.50 to 2,107. "There are quite a few investors who are optimistic the Fed will cut interest rates further,'' said Gerold Kuehne, who helps manage a $220 million US equity fund at Liechtenstein Landesbank AG in Vaduz, Liechtenstein. ``Investors expect the market to stabilize eventually and that the Fed's first cut last week will help this process.''