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European stocks climbed the most in two months after a gauge of manufacturing in the euro area rose more than forecast and as investors awaited a Federal Reserve meeting starting tomorrow to gauge the timing of stimulus cuts.

The Stoxx Europe 600 Index advanced 1.3 percent to 313.64 at 4:37 p.m. in London. The regional benchmark gauge fell for two straight weeks, the first back-to-back weekly losses since Oct. 4, as better-than-estimated U.S. economic data led some investors to speculate the Fed will decide to slow bond purchases as early as this week.

National benchmark indexes gained in all of the western European markets except Greece and Luxembourg.

FTSE 100 6,522.2 +82.24 +1.28% CAC 40 4,119.88 +60.17 +1.48% DAX 9,163.56 +157.10 +1.74%  

Euro-area factory output grew at a faster pace in December than economists had forecast, led by Germany. An index based on a survey of purchasing managers in the manufacturing industry increased to 52.7 from 51.6 in November, London-based Markit Economics said in a statement. That beat the estimate of 51.9. European

Central Bank President Mario Draghi said at the European Parliament in Brussels today that euro-area fourth-quarter growth will be modest.

U.S. industrial production climbed in November by the most in a year, a report from the Federal Reserve showed today in Washington. Output at factories, mines and utilities rose 1.1 percent after a revised 0.1 percent gain in October that was previously reported as a decline. The median forecast called for a 0.6 percent increase. A separate report showed a gauge of manufacturing in the New York region rose less than economists projected.

Aggreko jumped 8.5 percent to 1,645 pence. The provider of mobile-power generators forecast debt will drop by 200 million pounds ($326 million) compared with the year-ago period. The company expects full-year results to beat estimates, according to a statement. It also announced contracts to provide temporary power to the FIFA World Cup in Brazil and the Commonwealth Games in Glasgow next year.

Deutsche Telekom climbed 3.8 percent to 11.79 euros. Sprint is studying antitrust concerns and may make a bid for T-Mobile in the first half of next year, the Wall Street Journal reported, citing people familiar with the matter. Deutsche Telekom merged its T-Mobile USA unit with MetroPCS Communications Inc.

Moncler rose to 14.97 euros, or 47 percent higher than its initial public offering price, after investors sought about 27 times the amount of stock available. Moncler’s private-equity owners have raised about 784 million euros ($1.08 billion) after selling shares at the top of a targeted range and exercising an over-allotment option.

Hennes & Mauritz AB (HMB) advanced 1.7 percent to 283.10 kronor. Europe’s second-biggest clothing retailer said revenue at stores and operations open at least a year rose 10 percent last month compared with a year earlier. That topped the 4 percent gain estimated in a survey of analysts by SME Direkt. It was the biggest advance in same-store sales in 20 months. The Stockholm-based company’s total sales rose 21 percent in November, compared with a projected 14 percent gain.

ArcelorMittal (MT) SA declined 2.7 percent to 11.72 euros. Nomura Holdings Inc. cut its recommendation on the steelmaker to reduce from buy, saying steel prices will probably fall.