European stocks climbed from a six-month low as the People's Bank of China allayed concern over a cash crunch, and as U.S. data on durable goods, new-home sales and confidence increased more than economists had projected.

China's central bank said it will keep money-market rates at a "reasonable" level and seasonal forces that have driven them up will fade.

The People's Bank of China has provided liquidity to some financial institutions to stabilize money market rates and will use short-term liquidity operation and standing lending facility tools to ensure steady markets, according to a statement posted to its website today.

Orders for U.S. durable goods rose more than forecast in May. Bookings for goods meant to last at least three years climbed 3.6 percent, after increasing a revised 3.6 percent the prior month, the Commerce Department reported today in Washington. The median forecast of 81 economists called for a 3 percent increase.

Sales of new U.S. homes also climbed more than estimated in May, to the highest level in almost five years. Purchases rose 2.1 percent to an annualized pace of 476,000 homes, exceeding all estimates in a survey and the most since July 2008, the Commerce Department said today in Washington.

The Conference Board's index of U.S. consumer confidence increased to 81.4 in June from 74.3 a month earlier, data from the New York-based private research group showed today. The median forecast of 77 economists called for a reading of 75.1.

European Central Bank President Mario Draghi said the euro-area economy still requires a loose monetary policy from the central bank.

National benchmark indexes rose in all of the 18 western European markets except Italy. The U.K.'s FTSE 100 added 1.2 percent, while France's CAC 40 advanced 1.5 percent. Germany's DAX increased 1.6 percent.

Peugeot rallied 4.9 percent to 6.11 euros, its biggest gain in more than a month. Europe's second-largest carmaker said it has received more than 26,000 orders in Europe for the 2008-model crossover. Peugeot is betting that the new 208 compact city car and the 2008, a derivative of that vehicle, will help it keep market share in Europe.

Vinci rose 3.9 percent to 37.60 euros. Berenberg initiated coverage of Europe's largest builder with a buy rating, saying that the company's size, balance sheet and technical expertise give it a competitive advantage over its European peers.

Icade SA advanced 3.1 percent to 60.19 euros. UBS AG raised its recommendation on the company to buy from neutral, with analysts led by Kristian Bandy saying the shares look cheap before a court ruling this week on the office landlord's takeover of Silic SA.