June 26 (Reuters) - Jefferies Financial ( JEF ) on

Wednesday beat analysts' estimates for second-quarter profit as

the bank earned higher fees from advising on deals as well as

underwriting stock and bond sales.

Its earnings, viewed as an early indicator of results at

major investment banks such as Goldman Sachs ( GS ) and Morgan

Stanley ( MS ), underscore the strong recovery in the corporate

dealmaking space.

Expectations of a soft landing for the U.S. economy have

sparked a surge in large mergers and acquisitions (M&A) this

year. Buyers are also selling bonds to fund their purchases,

while a strong rally in equities has boosted investors' appetite

for new offerings.

Jefferies' investment banking revenue in the second quarter

ended May 31 soared 59% from a year earlier to $803.2 million,

helped by a strong performance in its advisory as well as equity

and debt underwriting businesses.

"The market is strengthening," Jefferies President Brian

Friedman told Reuters and added that the company's ECM (equity

capital markets) and M&A numbers reflect a gain in market share.

The bank's capital markets revenue jumped 24%, thanks to

strength in equities, and helped Jefferies' total revenue climb

60% to $1.66 billion.

Analysts had expected total revenue of $1.59 billion

according to data polled by LSEG.

In the reported quarter, the company expanded its

partnership with Japan's Sumitomo Mitsui Banking Corp (SMBC) as

it looks to tap into the dealmaking market in Canada, which

offers a competitive advantage for U.S. investment banks.

Jefferies net profit attributable to common shareholders

rose nearly twelve-fold to $145.7 million, or 64 cents per

share. Analysts had expected a profit of 63 cents per share, per

LSEG data.

Shares of the company were down 1.8% in extended trading.

So far this year, Jefferies shares have gained nearly 14%,

while those of Goldman Sachs ( GS ) and Morgan Stanley ( MS )

jumped 19% and 5%, respectively.

(Reporting by Lananh Nguyen in New York and Pritam Biswas in

Bengaluru; Editing by Shinjini Ganguli)