Nov. 1 (Bloomberg) -- European stocks gained, lifted by mining companies such as BHP Billiton on optimism higher interest rates in China won't sap demand for commodities. Energy companies also climbed as oil rose for a second day in New York.

``The growth rate of China will remain very strong, and the Chinese story for oil and metals will keep on going for the next five to eight years,'' said John Smith, who oversees the equivalent of $4.5 billion in assets at Brown Shipley in Manchester, England.

He owns more shares of BHP Billiton and BP Plc than are represented in benchmarks because of their prospects for sustained stock gains and profit growth.

The Royal/Dutch Shell Group increased after announcing the sale of a natural-gas network venture. Technip SA, Europe's largest oil-services company, gained after Merrill Lynch & Co. advised investors to buy the shares.

The Dow Jones Stoxx 50 added 0.5 percent to 2704.95 as of 10.18 a.m. in London. The Stoxx 600 rose 0.4 percent to 241.24 and the Euro Stoxx 50, a benchmark for the 12 countries using the euro, gained 0.4 percent to 2823.47.

The Stoxx 600 basic-resources and energy industry subindexes were the two-worst performers among 18 groups last week, shedding 2.1 percent and 1.5 percent respectively on concern demand for commodities in China would slow after the world's fastest-growing major economy raised interest rates.

``If you're comfortable with the view that China will continue to run, then situations like this are just opportunities,'' said Tim Barker, who helps manage the equivalent of about $30 billion, including BHP Billiton and Rio Tinto shares, at BT Financial Group in Sydney.

Benchmarks Gain

Benchmark indexes gained in the 14 Western European markets that were open. France's CAC 40 Index added 0.5 percent, as did Germany's DAX Index. The U.K.'s FTSE 100 Index rose 0.7 percent. September futures on the Euro Stoxx 50 increased 0.5 percent.

The Spanish and Austrian markets are closed for holidays today.

BHP Billiton, the world's biggest mining company, gained 2.4 percent to 567 pence. Anglo American, the world's second-biggest miner, added 1.8 percent to 1216 pence. Rio Tinto, the world's second-largest iron-ore producer, rose 1.6 percent to 1447 pence.

Copper futures jumped 4.7 percent in London on Oct. 29, the most since January 2002. They may rise for a second week as inventories dwindle and investors shake off concerns that demand in China will slow down, a Bloomberg survey of analysts and traders showed. Copper prices in New York have gained 29 percent this year.

Gold futures in New York rose as much as 0.5 percent after a report showing slower-than-expected U.S. economic growth weakened the dollar against the euro and boosted demand for gold as an alternative investment.

Crude Oil Rises

Crude oil rose in New York on reports unions in Nigeria, the fifth-biggest supplier to the U.S., have called a strike to disrupt the country's oil exports.

Oil for December delivery rose as much 1.1 percent to $52.33 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The futures lost 6.1 percent last week after U.S. oil stockpiles rose more than expected and China raised interest rates.

BP, Europe's largest oil company, gained 1.4 percent to 535 pence.

Shell Transport & Trading Co., which owns 40 percent of Royal Dutch/Shell, Europe's second-largest oil company, gained 1.2 percent to 434 pence. Royal Dutch Petroleum Co., which owns the rest, added 0.5 percent to 42.78 euros.

Royal/Dutch Shell and Exxon Mobil Corp. agreed to sell the natural gas network of Gasunie to the Dutch state for 2.78 billion euros ($3.55 billion), completing years of talks to help open the market to competition.

Technip advanced 2.3 percent to 125.7 euros. The stock was raised to ``buy'' from ``neutral'' at Merrill Lynch. The brokerage also added the shares to its ``Focus 1'' list of preferred companies.

ABN Shares Slip

ABN Amro Holding NV, the largest Dutch bank, shed 1.7 percent to 18.43 euros, leading decliners on the Stoxx 50. It said net income increased to 1.05 billion euros in the third quarter, or 0.62 cents a share, from 832 million euros, or 0.51 cents in the same period a year earlier. Excluding the gain from selling its stake in Bank of Asia Pcl, ABN Amro earned 838 million euros, matching the median estimate of analysts surveyed by Bloomberg.

Royal KPN NV, the largest Dutch phone company, lost 2.9 percent to 6.09 euros. The company said profitability this year will be at the lower end of its forecasts as it invests in new businesses.

HVB Group, Germany's second-largest bank by assets, slid 2.2 percent to 15 euros. HVB may say it will not reach a previous profit forecast of between 1.4 billion euros and 1.7 billion euros, when it announces its third quarter results on Nov. 4, the Financial Times said, citing people close to the matter it didn't name. The bank may achieve analysts' consensus expectations of 1.2 billion euros, the FT said.

Getronics Falls

Getronics NV lost 4.9 percent to 1.54 euros. The largest Dutch corporate computer-network services provider offered to buy competitor PinkRoccade NV in a 338 million-euro stock and cash bid.

Separately, Getronics said third-quarter net income was 3 million euros, compared with a loss of 20 million euros in the same period last year. Sales fell to 541 million euros from 596 million euros.

Allianz AG rose 1 percent to 84.20 euros. Europe's largest insurer had its recommendation raised to ``buy'' from ``hold'' by analysts at Deutsche Bank. The brokerage said Allianz's shares may be cheap relative to the outlook for the company's profitability.

Infineon Technologies AG fell 0.8 percent to 8.47 euros after Goldman Sachs Group Inc. advised investors to pare holdings of the region's No. 2 semiconductor-maker, saying prices for its products might drop.

Matthew Gehl, an analyst at Goldman Sachs, cut his recommendation on Infineon to ``in-line'' from ``outperform'' and lowered his earnings-per-share forecast for 2005 to 55 euro cents (70 U.S. cents) from 69 cents, citing concern that chip oversupply next year will weigh on prices.

The manufacturing industry in the 12 nations sharing the euro grew at the slowest pace in 10 months in October as record oil prices crimped global demand and squeezed companies' profit margins.

An index based on a survey of about 3,000 purchasing managers compiled by NTC Research Ltd. for Reuters Group Plc fell to 52.4 from 53.1 in September, the lowest reading since December 2003, according to figures on the Internet. Economists expected a drop to 53, the median of 38 forecasts in a Bloomberg survey showed. A reading above 50 indicates expansion.

Equity markets may react this week to the outcome of the U.S. presidential elections on Nov. 2, according to strategists. President George W. Bush and Senator John Kerry were deadlocked in state and national polls of likely voters released last night.

``The market is waiting for the U.S. election,'' said Ivo Kovachev, who helps manage about $700 million at Driehaus Capital Management in Prague. ``Then it's ready to rally.''

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net.

Last Updated: November 1, 2004 05:34 EST