European stocks rose, after their first weekly gain since May 17, as euro-area factory output in June contracted less than estimated and Japanese manufacturers turned optimistic for the first time since September 2011.

The Stoxx Europe 600 Index added 1.2 percent to 288.29 at the close of trading. The benchmark advanced 1.7 percent last week as China took steps to ease a cash crunch. It still lost 5.3 percent in June after Federal Reserve Chairman Ben S. Bernanke said the central bank could taper stimulus measures if the U.S. economy improves sustainably.

In Japan, a central bank report showed the quarterly Tankan index (JNTSMFG) for large manufacturers rose to plus 4 in June from minus 8 in March. The first positive figure since September 2011 signaled that optimists outnumber pessimists. The median estimate of economists surveyed was for 3.

In the U.S., a report showed that factory output in the world's largest economy increased in June. The Institute for Supply Management's manufacturing index rose to 50.9 from 49 the prior month. Economists survey had forecast an increase to 50.5.

National benchmark indexes advanced in all of the western European markets except Iceland.

FTSE 100 6,307.78 +92.31 +1.49% CAC 40 3,767.48 +28.57 +0.76% DAX 7,983.92 +24.70 +0.31%

In China, an official purchasing managers' index of factory output dropped to 50.1, the lowest level in four months, from 50.8, the National Bureau of Statistics and China Federation of Logistics and Purchasing said. A private PMI from HSBC Holdings and Markit was 48.2, the weakest since September. Readings above 50 signal expansion.

Nokia Oyj (NOK1V) jumped 3.7 percent to 2.95 euros after saying it will buy Siemens' 50 percent holding in Nokia Siemens Networks for 1.7 billion euros ($2.2 billion).

Siemens gained 2.6 percent to 79.63 euros, its biggest gain since August 2012, after the companies agreed to end their six-year long telecommunications-equipment joint venture.

Hennes & Mauritz AB (HMB) added 4 percent to 229.30 kronor after Bank of America Corp. raised its recommendation on the shares to buy from neutral, citing an improved outlook for the retailer's online business.

Hunting Plc (HTG) rallied 9 percent to 798 pence, its biggest gain since August 2011, after the U.K. oil-services provider said first-half results will meet analysts' estimates and that its outlook remains positive for the rest of the year.

Peugeot fell 2.5 percent to 6.17 euros after data showed the carmaker's registrations in France fell 9.5 percent to 57,962 in June.

U.S. stock futures climbed before a report that may show manufacturing rebounded last month from its largest contraction since 2009.

Global Stocks:

Nikkei 13,852.5 +175.18 +1.28%

Shanghai Composite 1,995.24 +16.04 +0.81%

FTSE 6,276.43 +60.96 +0.98%

CAC 3,763.98 +25.07 +0.67%

DAX 7,980.9 +21.68 +0.27%

Crude oil $97.62 +1.10%

Gold $1235.80 +0.99%

Upgrades:

Apple (AAPL) upgraded from Outperform to Strong Buy at Raymond James

Downgrades:

Other:

European stocks advanced, after their first weekly gain since May 17, as euro-area factory output contracted in June less than initially estimated.

A gauge of manufacturing in the 17-nation euro area increased to 48.8 last month from 48.3 in May, London-based Markit Economics said today. That's above an initial estimate of 48.7 on June 20. The gauge has been below 50, indicating contraction, since July 2011.

In Japan, a central bank report showed the quarterly Tankan index for large manufacturers rose to 4 in June from minus 8 in March. The first positive figure since September 2011 signaled that optimists outnumber pessimists. The median estimate of economists was for 3.

Nokia Oyj jumped 7.5 percent to 3.06 euros after saying it will buy Siemens' 50 percent holding in Nokia Siemens Network for 1.7 billion euros ($2.2 billion). Siemens added 2.4 percent to 79.52 euros after the companies agreed to end their six-year long telecommunications-equipment joint venture.

Hennes & Mauritz AB rose 3.6 percent to 228.30 kronor after Bank of America Corp. raised its recommendation on the shares to buy from neutral.

Pirelli dropped 1.1 percent to 8.80 euros after Sky Sports reported the Italian tire supplier has been called into a meeting this week with Formula One's governing body to explain why there were four tire blowouts at the British Grand Prix.

FTSE 100 6,275.18 +59.71 +0.96%

CAC 40 3,769.69 +30.78 +0.82%

DAX 8,001.86 +42.64 +0.54%

Asian stocks outside Japan fell, with a regional index heading for its first decline in four days, after an official gauge of manufacturing activity in China expanded at the slowest pace in four months.

Nikkei 225 13,852.5 +175.18 +1.28%

Hang Seng 20,803.29 +363.21 +1.78%

S&P/ASX 200 4,710.3 -92.29 -1.92%

Shanghai Composite 1,995.24 +16.04 +0.81%

Fortescue Metals Group Ltd., Australia's third-largest iron-ore producer that counts China as its biggest market, dropped 3 percent.

CapitaLand Ltd. dropped 1.6 percent, pacing losses among Singapore homebuilders after the city's central bank tightened lending rules to curb rising property prices.

Toyota Motor Corp., the world's No. 1 carmaker, gained 1.2 percent as the yen weakened against the dollar.