European stocks close

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.