European stocks advanced for a fourth week as companies from BP Plc to Alcatel-Lucent SA posted results that exceeded estimates, while cooling inflation fueled speculation the European Central Bank may ease monetary policy.

The Stoxx Europe 600 Index advanced 0.4 percent to 321.50 this week, extending its rally so far this year to 15 percent. The gauge climbed to a five-year high of 322.37 on Oct. 31, capping its second consecutive month of gains.

Inflation in the region fell to 0.7 percent in October, the lowest annual rate since November 2009 and below the ECB’s target of 2 percent. Economists at Royal Bank of Scotland Group Plc, UBS, and Bank of America Corp.’s Merrill Lynch unit project the central bank will cut its benchmark interest rate to 0.25 percent after its policy meeting next week. Still, 65 of 68 economists predict no change from 0.5 percent, estimates compiled by Bloomberg News show.

National benchmark indexes rose in 14 of the 18 western European markets this week. The U.K.’s FTSE 100 (UKX) advanced 0.2 percent, while Germany’s DAX added 0.3 percent and France’s CAC 40 gained less than 0.1 percent.

BP rallied 7.5 percent, its biggest weekly increase since December 2011, after raising its dividend by 5.6 percent to 9.5 cents a share as third-quarter profit slipped less than analysts had predicted. Europe’s third-largest oil company also said it will sell a further $10 billion of assets by the end of 2015 and give most of the proceeds to shareholders, favoring buybacks.

Alcatel-Lucent jumped 18 percent, rebounding from its worst week since April, after reporting a net loss of 200 million euros ($270 million), compared with 316 million euros a year earlier and analyst predictions of 274 million euros. Spending cuts helped the French network-equipment maker save 259 million euros so far this year, putting it on course to exceed its full-year target for as much as 300 million euros in savings.

Nokia Oyj, which in September agreed to sell its mobile-phone division to Microsoft Corp., increased 12 percent. The Finnish company predicted operating profit, excluding some costs, will be as high as 16 percent of sales at its network unit in the final quarter of 2013. That compares with 8.4 percent in the previous quarter.

BT Group Plc rose 5.4 percent after Britain’s biggest fixed-line phone company reported a smaller-than-projected decline in profit as more than 2 million customers subscribed to its new BT Sport channels.

European stocks dropped, paring the fourth weekly gain for the Stoxx Europe 600 Index, as investors awaited data that may show U.S. manufacturing growth slowed. U.S. index futures were little changed, while Asian shares fell.

The Stoxx 600 slipped 0.2 percent to 321.7 at 10:54 a.m. in London. The gauge has climbed 0.5 percent this week, yesterday closing at its highest level since May 2008, as the Federal Reserve refrained from paring stimulus measures and as companies from BNP Paribas SA to Volkswagen AG reported better-than-forecast profit.

A release may show the Institute for Supply Management’s manufacturing index fell to 55 last month from September’s 56.2 that was the strongest since April 2011. Readings above 50 indicate expansion. The report would follow data from China, where the official manufacturing gauge rose more than forecast to an 18-month high. A Chinese PMI from HSBC Holdings Plc and Markit Economics also topped projections.

Investors are watching data to gauge the health of the U.S. economy after the Federal Reserve this week said it needs to see more evidence of sustained improvement before slowing the pace of its monthly bond purchases.

RBS fell 5.4 percent to 347.7 pence. Britain’s biggest publicly owned lender said it will write down as much as 4.5 billion pounds ($7.2 billion) in the fourth quarter after transferring 38.3 billion pounds of its riskiest loans to an internal bad bank. RBS (RBS) also posted a net loss of 828 million pounds in the third quarter.

Renault dropped 5.6 percent to 60.88 euros, its biggest retreat since June 20. Nissan lowered its full-year profit forecast by 15 percent. Japan’s second-biggest carmaker expects to post net income of 355 billion yen ($3.6 billion) in the year ending March, compared with its previous estimate of 420 billion yen and the average projection of 440.3 billion yen.

Meggitt Plc tumbled 10 percent to 515.5 pence, its largest decline since April 2009. The world’s biggest provider of wheels and brakes for military aircraft cut its full-year sales forecast, citing short-term production problems at a unit. Meggitt predicted sales growth in low single digits, compared with a previous forecast for a mid-single-digit increase.

ASM International NV, which makes machines used to turn silicon wafers into chips, rose 3 percent to 25.05 euros after reporting third-quarter sales of 116.4 million euros ($158 million). The surpassed the 110.4 million euros forecast on average by analysts.

FTSE 100 6,725.48 -5.95 -0.09%

CAC 40 4,285.61 -14.28 -0.33%

DAX 9,021.75 -12.17 -0.13%

Asian stocks fell, with the regional benchmark index paring its weekly advance, as speculation the Federal Reserve will reduce stimulus in coming months overshadowed improving China manufacturing data.

Nikkei 225 14,201.57 -126.37 -0.88%

S&P/ASX 200 5,411.12 -14.37 -0.26%

Shanghai Composite 2,149.56 +7.95 +0.37%

Sony Corp. slumped the most in five years in Tokyo after the television and digital camera maker unexpectedly lowered its full-year profit forecast by 40 percent.

Sydney Airport sank 3.6 percent after its largest shareholder Macquarie Group Ltd. announced plans to give some of its stake to its investors.

Panasonic Corp. surged 6.2 percent, a fifth day of gains, after doubling its full-year profit forecast.

Nikkei 225 14,327.94 -174,41 -1,20%

Hang Seng 23,206.37 -97,65 -0,42%

S & P / ASX 200 5,425.5 -5.36 -0.10%

Shanghai Composite -0,87 -18,85 2,141.61%

FTSE 100 6,731.43 -46.27 -0.68%

CAC 40 4,299.89 +25.78 +0.60%

DAX 9,033.92 +23.65 +0.26%

Dow 15,545.75 -73.01 -0.47%

Nasdaq 3,919.71 -10.91 -0.28%

S&P 500 1,756.54 -6.77 -0.38%