The Dow Jones Stoxx 600 Index added 0.3%, reaching the highest since November 2000 on Wednesday. The Stoxx 50 rose 0.1% and the Euro Stoxx 50, a gauge for the 13 nations using the euro, advanced 0.5%.

"We remain overweight in equities as earnings keep coming out OK, " said Peter Braendle, a fund manager at Zurich-based Swisscanto Asset Management, which oversees the equivalent of $46bn. "You also have the added bonus of mergers and acquisitions, which will further help shares."

The Stoxx 600 has gained every week this year except one on expectations earnings will rise and companies will boost sales through mergers. Of the 19 Stoxx 50 members to report fourth-quarter results 58% have beaten analysts' estimates.

"The overall tone has improved as the earnings season has progressed, " said Mike Lenhoff, chief strategist at Brewin Dolphin Securities in London.

Roche limited gains after the drug maker reported profit that missed analysts' estimates. HSBC declined after Europe's largest bank said it will boost provisions for bad loans.

National benchmarks rose in 16 of the 18 western European markets.

Germany's DAX rose 0.4%, France's CAC 40 gained 0.3% and the UK's FTSE 100 advanced 1.1%.

Rautaruukki surged 18%, the best-performing stock last week. Finland's biggest producer of carbon steel said fourth-quarter profit more than doubled on demand for construction materials in eastern Europe.

Ryanair, Europe's biggest discount carrier, gained 9.9% in the week, its best performance since 2005.

The company raised its fullyear earnings forecast and third-quarter profit unexpectedly increased 30% on higher fares and baggage charges. Net income rose to Euro47.7m, eclipsing the Euro21m median estimate of analysts surveyed by Bloomberg.

EasyJet, Europe's secondbiggest discount airline, rose 1.3%. The company said fullyear earnings will surge after posting a 15% jump in first-quarter sales. Pre-tax profit will grow between 40% and 50%.

GlaxoSmithKline added 2.1%. Europe's largest drug maker said fourth-quarter profit rose 5.4% to £1.18bn (Euro1.77bn) on sales of the Avandia diabetes treatment and predicted 2007 earnings growth that exceeds analysts' estimates.

Shares of In"neon, Europe's second-biggest maker of semiconductors, led technology stocks higher, climbing 8.4% last week. The company won an order to supply mobile phone chips to Nokia, the world's largest maker of handsets, spurring the shares to their biggest gain in four years on Wednesday.

No financial details of the deal were given.