- ECB meeting in focus
- Eurozone manufacturing grows
- UK construction activity increases
- Chinese services growth accelerated in October
- UK growth forecast raised by CBI
FTSE 100: 0.48%
CAC 40: 0.28%
FTSE MIB: 0.47%
IBEX 35: 0.30%
Stoxx 600: 0.37%
European equities advanced after a report showed continued growth in Eurozone manufacturing and investors speculated on the European Central Bank's (ECB) monetary policy ahead of this week's meeting.
The Eurozone purchasing managers' index (PMI) for manufacturing came in at 51.3 in October, in line with the previous month and with forecasts. A reading above 50 signals expansion.
German manufacturing rose to 51.7 last month from 51.5 in September, beating the consensus for the reading to remain unchanged. France and Italy, on the other hand, saw activity decline.
In the UK, construction PMI climbed to 59.4 in October from 58.9 a month earlier, above the forecast for a reading of 58.7.
The data follows the release of China's services PMI on Sunday which rose to a 13-month high of 56.3 in October from September's 55.4.
"Given the efforts of the Chinese government to steer the economy away from the export-led model to one focused more on services, this data is increasingly important, and very encouraging," said Craig Erlam, Market Analyst at Alpari.
"If the services sector can pick up more and more of the slack here, it will go a long way to preventing a hard landing, which many fear could happen, while allowing the government to address its growing debt."
Traders are also hoping the ECB opens its door to further monetary easing at its meeting this week amid soft economic data.
UBS and RBS are predicting an interest rate cut at Thursday's meeting following a fall in Eurozone inflation to 0.7% as reported last week.
CBI raises UK economic growth forecast
The Confederation of British Industry (CBI) has lifted forecasts for UK economic growth in a quarterly report.
The business lobby predicts the economy will expand 1.4% this year and 2.4% in 2014, compared to 1.2% and 2.3% projected in August.
It expects business investment and trade to aid the recovery starting next year.
Separately, CBI said the UK should stay in the European Union (EU) as it would be "overwhelmingly" best for business.
EU membership is worth about £62-78bn to the UK, between 4-5% of annual output, CBI noted.
However, it said reforms are needed including the removal of barriers to e-commerce.
Ryanair falls after cutting annual guidance
tumbled after saying its annual profit will fall for the first time in five years as airfares drop in Europe due to fierce competition.
Shares in HSBC, the FTSE 100's largest stock by market capitalisation, rose strongly in London after delivering a 10% jump in underlying profits in the third quarter.
Dufry rallied after the Swiss operator of duty-free shops posted a 15% rise in nine-month sales to 2.69bn francs.
PostNL advanced after the Dutch postal operator boosted its forecast for full-year underlying cash operating profit.
Fuchs Petrolub climbed as the German lubricant maker said nine-month earnings before interest and tax rose to €237.2m from €224.2m.
Other asset classes increase
Brent crude futures were up $0.094 to $106.010per barrel on the ICE.
The euro rose 0.14% to $1.3506.