European stocks advanced, with the Stoxx Europe 600 Index climbing to the highest since July 26, as reports showed German investor confidence in March increased more than forecast.

In Germany, the ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which seeks to predict economic developments six months in advance, rose to 22.3 from 5.4 in February. That’s the fourth straight increase. Economists forecast a gain to 10, according to the median of 36 estimates in a Bloomberg News survey.

Euro-area finance ministers cleared a second rescue of Greece, paving the way for the first payment from the 130 billion-euro package ($170 billion) to be made this month. Officials will give a formal approval on March 14, a day before the International Monetary Fund board votes on its contribution.

National benchmark indexes rose in all of the 18 western European markets. France’s CAC 40 climbed 1.7 percent and Germany’s DAX added 1.4 percent. The U.K.’s FTSE 100 rose 1.1 percent.

Raiffeisen, eastern Europe’s third-biggest lender, advanced 1.4 percent to 25.20 euros. UniCredit advanced 3.9 percent to 4.05 euros.

Tod’s SpA, the Italian owner of the Hogan brand, jumped 7.2 percent to 84.45 euros. The company reported a 20 percent increase in 2011 earnings before interest, taxes, depreciation and amortization to 232.4 million euros, compared with the average analyst estimate for 230.7 million euros. The company raised its dividend 25 percent to 2.5 euros per share.

Eramet jumped 6 percent to 113.70 euros. Vedanta Resources Plc climbed 4.5 percent to 1,430 pence. Copper, lead, nickel and tin were among metals prices rising in London.