STOCKS NEWS EUROPE-Zurich, Swiss Re benefit from upgrades

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12:12GMT 31Oct2008-Zurich, Swiss Re benefit from upgrades

--------------------------------------------------------- Zurich Financial Services (ZURN.VX) shares rise more than 5 percent in a weaker European insurance sector .SXIP, helped by a rating upgrade by Merrill Lynch, traders say.

"First, we now expect to see a better non-life environment and this has boosted our estimates," Merrill analyst Brian Shea says in a note, raising his rating to "buy" from "neutral".

"Second, the shares have fallen sharply, pushing the valuation down to what we consider a very attractive level."

Reinsurer Swiss Re's (RUKN.VX) shares gain nearly 4 percent, also boosted by a Merrill upgrade to "buy" from "neutral".

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