European stocks rebound after election

European stocks rebounded from the biggest drop in two weeks and US equity futures advanced as companies including Hermes and Swiss Re posted results that exceeded expectations.

Oil gained from the lowest level in almost four months. Oil climbed 0.7 per cent to $85.05 after plunging 4.8 per cent.

The Stoxx Europe 600 Index rose 0.3 per cent as of 8.01am in London.

Standard and Poor's 500 Index futures added 0.4 per cent after yesterday decreasing 2.4 per cent.

The MSCI Asia Pacific Index dropped 1.4 per cent.

The yen strengthened against most of its major peers and the dollar traded at $1.2773 per euro, near the strongest in two months.

Hermes, the French maker of Birkin bags and silk scarves, increased its sales forecast for the year, and insurance provider Swiss Re reported third quarter profit that exceeded estimates.

Greek prime minister Antonis Samaras got enough support to approve austerity measures needed to unlock bailout funds, while Germany's exports declined 2.5 per cent in September.

The Stoxx Europe 600 Index has rallied 16 per cent from this year's low on June 4 as central banks around the world reduced borrowing costs and expanded asset-buying programs. Hermes rose 2.2 percent today, while Swiss Re added 3 percent.

The European Central Bank will leave its benchmark interest rate at a record low of 0.75 percent at a meeting today, according to economists in a survey.

The Bank of England will also leave its key interest rate at a record low of 0.5 per cent, said economists before the report.

Equities fell across Asia today following declines in the US and Europe yesterday.

US president Barack Obama, who was re-elected yesterday, faces negotiations to avoid the so-called fiscal cliff.

Unless the US Congress can strike an agreement on a budget that reduces the debt, $607 billion of tax increases and spending cuts are set to kick in automatically in January.

Treasuries held gains after surging yesterday the most since August.

Ten-year US notes yielded 1.67 per cent, versus a one-month low of 1.62 per cent yesterday.

Bloomberg