European stocks advanced to the highest level in more than five years, with the Stoxx Europe 600 Index completing its second monthly gain, as better-than-estimated earnings outweighed speculation the Federal Reserve may trim bond purchases sooner than forecast.

BNP Paribas SA climbed 3.4 percent after posting an unexpected increase in third-quarter net income. Alcatel-Lucent surged the most in five years after reporting a narrower-than- forecast loss. Royal Dutch Shell Plc declined the most more than two years after posting a 32 percent profit slump. Novo Nordisk A/S slid 7.4 percent after earnings missed projections.

The Stoxx 600 rose 0.5 percent to 322.25, its highest level since May 2008. The gauge rallied 3.8 percent in October, its eighth monthly increase this year, as U.S. lawmakers resolved a fiscal impasse.

“We have to keep an eye on Fed tapering,” said Neil Veitch, investment director at SVM Asset Management in Edinburgh. “The rally in the last three to four years has been led by unconventional monetary policy. That has obviously dominated the investment landscape for a prolonged period of time. As a consequence, many assets have become mis-priced. So as a portfolio manager, it’s imperative you keep an eye on any structural developments regarding quantitative easing.”

National benchmark indexes rose in 11 of the 18 western European markets. Germany’s DAX added 0.2 percent and France’s CAC 40 gained 0.6 percent. The U.K.’s FTSE 100 slid 0.7 percent.

The Federal Open Market Committee yesterday kept its monthly bond purchases at $85 billion and said that while it sees signs of strength in the U.S. economy, it would wait for more evidence of sustained improvement before slowing stimulus. In a statement released after a two-day meeting, the FOMC dropped its warning from last month that tighter financial conditions could impair recovery.

The odds for the Fed to start reducing bond purchases in January rose to 45 percent from 25 percent before the statement, Citigroup Inc. said. Economists surveyed by Bloomberg Oct. 17-18 predicted the Fed would wait until March to begin the cuts.

A release today showed fewer Americans filed first-time applications for jobless benefits last week. Economists in another poll predict the Institute for Supply Management will say tomorrow its manufacturing index fell in October.

In the euro area, the inflation rate unexpectedly dropped in October, fueling speculation the European Central Bank will cut interest rates to boost recovery. The ECB holds its next policy meeting on Nov. 7.