- US jobs report in focus
- China to overtake US as world's biggest trader
- UK construction output falls
- UK industrial and manufacturing output flat
FTSE 100: 0.87%
CAC 40: 0.73%
FTSE MIB: 0.55%
IBEX 35: 0.72%
Stoxx 600: 0.72%
European stocks gained ahead of a report which is expected to show the US last year added the most jobs since 2005.
The US is expected to have added 195,000 jobs in December, compared to 203,000 in November, according to the consensus forecast. The anticipated increase would bring the gain in 2013 to 2.27m, the most since in eight years.
"As always, this is probably the most important economic release of the month," according to Alpari UK Market Analyst, Craig Erlam.
"This is particularly true at a time when the Fed's monetary policy is such an important driver in the markets as the central bank follows and analyses this release very closely."
The unemployment rate for December will also be released today and is projected to hold at 7% following the drop from 7.3% in November.
The Federal Reserve is in the process of winding down monetary stimulus after last month announcing it would cut monthly bond purchases by $10bn to $75bn.
The central bank is now weighing whether to introduce a further reduction after its next meeting at the end of the month.
Meanwhile, China has claimed it is "very likely" it overtook the US as the world's biggest trader, trading $4.16trn of exports and imports for 2013. The US is yet to release it full-year figures, but its trade for the first 11 months of 2013 totalled $3.5tn.
UK construction, manufacturing and industrial output
UK construction output fell by 4% in November on a month-on-month basis, according to data from the Office for National Statistics (ONS), missing consensus for a 0.8% rise. In October output increased 2%.
Separately the ONS also revealed that British manufacturing and industrial output fell short of forecasts in November with both industries coming in flat on the month.
Economists had expected an increase of 0.4% for both sectors. In October the two industries achieved a 0.2% rise in output.
"November's industrial production and construction figures signal that Q4 GDP growth is unlikely to have been quite as strong as the activity surveys have indicated," according to Capital Economics.
"Nonetheless, GDP still seems likely to have grown at a respectable rate."
Serco Group retreated after the UK National Audit Office said it may have to repay £3m to £4m to the government as they struggled with 2012 contracts to asylum seekers.
Metro rallied following reports Franz Haniel & Cie. which owns 30% of the German retailer, may ask Metro to sell its Real, Kaufhof or Media-Saturn units.
Oslo-based supplier of aluminium Norsk Hydro slumped after peer Alcoa posted earnings that missed analysts' estimates.
Swatch advanced after the biggest maker of Swiss watches reported 2013 gross sales that beat expectations.
The euro fell 0.7% to $1.3599.
Brent crude futures rose $0.486 to $106.910 per barrel.