STOCKS NEWS EUROPE-Swiss Re up on Morgan Stanley upgrade

Shares in Swiss Re (RUKN.VX) gain 1.7 percent to 48.06 Swiss francs, against a 0.4 percent rise in the DJ STOXX European insurance index .SXIP, after Morgan Stanley upgrades the stock to "overweight" from "equal weight" with a price target of 60.50 francs.

"Progress in the past 12 months gives us optimism that it can surpass expectations and narrow the 22 percent valuation gap with Munich Re," the Morgan Stanley analysts say, adding Swiss Re could resume dividends in 2011 -- earlier than previously expected.

"We now expect it to have 6 billion Swiss francs of surplus capital in 2011 after repaying the Berkshire Hathaway debt," the analysts say, citing rapid de-risking of the company's assets.

Reuters Messaging rm://jason.rhodes.reuters.com@reuters.net