European stocks gained, after falling the most in two months yesterday, amid speculation China may announce new stimulus measures to support economic growth and before the Spanish government presents its budget for 2013.

A report showed China’s industrial profits fell for a fifth month, increasing speculation the government will do more to support economic growth.

Rajoy may face renewed criticism today when the Cabinet approves the 2013 budget and presents measures to bolster the shrinking economy. The premier is struggling to persuade European peers, voters and investors that he can tackle the crisis. Spanish bond yields surged yesterday amid rising investor uncertainty over whether he will ask for external aid.

H&M slid 4.8 percent to 234.60 kronor after it reported third-quarter profit that trailed analysts’ estimates. Net income was 3.62 billion kronor ($550 million) in the three months ended Aug. 31, Stockholm-based H&M said today. The average projection of analysts was 4.05 billion kronor.

Volkswagen, Europe’s largest automaker, lost 1.7 percent to 143.95 euros and Renault SA declined 0.9 percent to 36.94 euros. Fiat SpA dropped 1 percent to 4.28 euros.

FTSE 100 5,792.05 +23.96 +0.42%

CAC 40 3,441.45 +26.61 +0.78%

DAX 7,314.56 +38.05 +0.52%