European stocks advanced

European stocks advanced, after their first weekly gain since May 17, as euro-area factory output contracted in June less than initially estimated.

A gauge of manufacturing in the 17-nation euro area increased to 48.8 last month from 48.3 in May, London-based Markit Economics said today. That's above an initial estimate of 48.7 on June 20. The gauge has been below 50, indicating contraction, since July 2011.

In Japan, a central bank report showed the quarterly Tankan index for large manufacturers rose to 4 in June from minus 8 in March. The first positive figure since September 2011 signaled that optimists outnumber pessimists. The median estimate of economists was for 3.

Nokia Oyj jumped 7.5 percent to 3.06 euros after saying it will buy Siemens' 50 percent holding in Nokia Siemens Network for 1.7 billion euros ($2.2 billion). Siemens added 2.4 percent to 79.52 euros after the companies agreed to end their six-year long telecommunications-equipment joint venture.

Hennes & Mauritz AB rose 3.6 percent to 228.30 kronor after Bank of America Corp. raised its recommendation on the shares to buy from neutral.

Pirelli dropped 1.1 percent to 8.80 euros after Sky Sports reported the Italian tire supplier has been called into a meeting this week with Formula One's governing body to explain why there were four tire blowouts at the British Grand Prix.

FTSE 100 6,275.18 +59.71 +0.96%

CAC 40 3,769.69 +30.78 +0.82%

DAX 8,001.86 +42.64 +0.54%