European stocks rose to their highest
level in almost seven years amid speculation the European
Central Bank will consider quantitative easing at its January
meeting, and as German factory orders and U.S. payrolls beat
forecasts.

The Stoxx Europe 600 Index climbed 1.8 percent to 350.97 at
the close of trading. Germany’s DAX Index reached a record. The
benchmark European gauge, which posted its fourth weekly
advance, slid yesterday after ECB President Mario Draghi
refrained from pledging QE for the euro area at the Governing
Council meeting. Draghi said the ECB will reassess the situation
early next year.

The council expects to consider a proposal for broad-based
asset purchases including sovereign debt at the next monetary-policy meeting on Jan. 22, according to two euro-area central-bank officials familiar with the deliberations.

“European markets are liquidity addicts at the moment,”
Otto Waser, chief investment officer at RA Research Asset
Management AG in Zurich, said by telephone. “You get rallies
whenever somebody eases in the world. The bounce back has been
in part due to slightly better economic trends in Europe. We had
fears in the market of a possible recession in Germany and they
avoided recession so the euro zone looks better.”

German factory orders, adjusted for seasonal swings and
inflation, climbed 2.5 percent after a revised increase of 1.1
percent in September, data from the Economy Ministry in Berlin
showed today. Economists had predicted a 0.5 percent increase.

U.S. Payrolls

Employers in the U.S. added 321,000 jobs in November,
beating forecasts, for the biggest gain since January 2012,
figures from the Labor Department showed today in Washington.
The jobless rate held at a six-year low of 5.8 percent.

“It’s a boom economy,” said John Plassard, vice president
at Mirabaud Securities LLP in Geneva. “Where is the crisis?
The private sector is really strong. There is a seasonality
factor, but those figures are incredible. The U.S. economy is
really on its way.”

National benchmark indexes gained in 16 of the 18 western
European markets, with Greece’s ASE Index rising 4.1 percent for
the best performance. Germany’s DAX Index added 2.4 percent,
while the U.K.’s FTSE 100 rose 1 percent.

Gauges of automakers, banks and telecommunications
companies were among the biggest advancers of the 19 industry
groups in the Stoxx 600. Daimler AG rose 3.6 percent, Volkswagen
AG increased 3 percent, and Peugeot SA added 3.2 percent.

Vodafone Group Plc climbed 3.1 percent after Goldman Sachs
Group Inc. upgraded the shares to buy from neutral, saying
Europe’s largest mobile operator will benefit from mergers and
acquisitions activity in the sector. The company is considering
a combination with Liberty Global Plc, people familiar with the
matter said on Dec. 1.

Banks Advance

HSBC Holdings Plc and Banco Santander SA contributed the
most to a gain in an index of banking stocks, rising more than 2
percent each. Lenders in Italy and Greece also advanced.
Mediobanca SpA rose 5.1 percent and National Bank of Greece
climbed 3.6 percent.

Berkeley Group Holdings Plc climbed 3.6 percent. Revenue in
the first half of the fiscal year rose to 1.02 billion pounds
($1.6 billion) from 821 million pounds, and the property
developer said it is on course to meet its dividend target.

United Internet AG added 3.2 percent after Goldman Sachs
Group Inc. recommended investors buy shares of the Web-access
provider, citing strong data-volume growth in Germany.

Intertek Group Plc advanced 2.4 percent. Deutsche Bank AG
raised its rating on the product-inspection company to buy,
saying the recent decline in shares due to the plunge in oil
prices has created an investment opportunity. Intertek slid 14
percent in November.

Enel Green Power SpA declined 0.8 percent, paring earlier
losses of as much as 6.2 percent. Kepler Cheuvreux SA removed
the Italian renewable energy developer from its European
utilities list, citing lower estimates for power prices.

To contact the reporter on this story:
Inyoung Hwang in London at
ihwang7@bloomberg.net

To contact the editors responsible for this story:
Cecile Vannucci at
cvannucci1@bloomberg.net
Alan Soughley, Namitha Jagadeesh