European stocks advanced for a third day as investors awaited U.S. housing data to gauge whether the Federal Reserve will signal stimulus cuts at its policy meeting starting today.

The Federal Open Market Committee begins a two-day policy meeting today, with Bernanke holding a press conference tomorrow. In that conference, Bernanke may signal the central bank is close to tapering its quantitative easing, the Financial Times wrote. The newspaper didn't cite anyone.

A report showed German investor confidence increased this month. The ZEW Center for European Economic Research in Mannheim, Germany, said its index of investor and analyst expectations rose to 38.5 this month from 36.4 in May. Economists on average had forecast 38.1. Zero is the dividing line between optimism and pessimism.

Kabel Deutschland advanced 3.7 percent to 85.53 euros, its highest price since it sold shares to the public in March 2010. Germany's largest cable TV operator said it received a proposal from Liberty, the cable company controlled by John Malone. The offer comes after Vodafone Group Plc last week said it approached the German company about a takeover.

Liberty offered Kabel Deutschland about 85 euros a share, the Financial Times reported. Vodafone's informal offer valued the German cable company at between 81 and 82 euros a share, people familiar with the matter said June 12.

Aveva jumped 5.5 percent to 2,376 pence as Citigroup raised its recommendation on the shares to buy from neutral. The U.K. maker of engineering-software products is well positioned for "robust growth" as it starts selling its E3D software for three-dimensional design, Citigroup said in a note.

Danske Bank fell 5.3 percent to 105.80 kroner after the Financial Supervisory Authority asked it to adjust its internal-rating model in a step that will require the lender to add about 100 billion kroner ($18 billion) to its risk-weighted assets "over time." Denmark's biggest lender had underestimated its risky assets, the regular said yesterday.

FTSE 100 6,373.61 +43.12 +0.68%

CAC 40 3,862.03 -1.63 -0.04%

DAX 8,216.67 +0.94 +0.01%