BP rallied 3.9 percent after Europe's second-biggest oil company said profit rose 83 percent in the third quarter. Air France-KLM Group, Europe's biggest airline, and Ryanair Holdings Plc, the region's largest discount carrier, gained after Citigroup Inc. recommended the stocks. Volkswagen AG surged as much as 93 percent to become the world's biggest company by market value.
The MSCI World Index added 1.2 percent to 844.36 at 9:15 a.m. in London, snapping a two-day, 8.4 percent drop. Europe's Dow Jones Stoxx 600 Index advanced 1.9 percent, while the MSCI Asia Pacific Index added 3.7 percent, erasing earlier losses of 2.8 percent. Standard & Poor's 500 Index futures rallied 4 percent.
More than $12 trillion was erased from the market value of equities this month, accounting for about one-third of the total value wiped off stocks this year, as almost $680 billion of writedowns and losses by banks triggered a freeze in credit markets.
The MSCI World Index has fallen 29 percent this month. The index of companies from 23 developed countries is trading at 10.5 times earnings of the companies in the index, near its lowest since at least 1995 when Bloomberg started following the data.
The Stoxx 600 is down 23 percent in October, headed for the worst month since October 1987. The pan-European index closed yesterday valued at 7.9 times profit, the lowest since at least January 2002. The S&P 500 for U.S. equities trades at 18.9 times profit.
Japanese stocks rose the most in two weeks, breaking a four-day losing streak that erased almost a quarter of the Nikkei 225 Stock Average's value and sent the gauge to a 26-year low. The Nikkei 225, which lost 23 percent in the previous four days, gained 459.02, or 6.4 percent, to close at 7,621.92 in Tokyo.
The Australian S&P/ASX 200 Index fell 14.60 points, or 0.4 percent, to 3,794.60 at the close in Sydney, its lowest close since Nov. 1, 2004.