The FTSEurofirst 300 Index provisionally closed higher - up 0.3 percent at 1,293.52 points, having hit a high of 1,297.01 during the day - with expectations of monetary stimulus from the European Central Bank (ECB) driving shares.
There was also plenty for investors to think about with a busy week of central bank meetings ahead. The policy committees of the European Central Bank (ECB) and Bank of England meet on Thursday, while on Friday U.S. non-farm payrolls data is due. The data could indicate whether the U.S. economy is improving, and follows Friday's better-than-expected manufacturing report.
European markets were supported by expectations that the ECB will take on an accommodative tone towards aiding the region's economy at its meeting.
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HSBC shares rose by 2.5 percent on Monday after it reported third-quarter underlying profit before tax of $5.06 billion, a rise of 10 percent year-on-year.
Ryanair was the biggest faller on European benchmarks on Monday with the budget airline further cutting its profit forecast for the year to March to 510 million euros ($688 million) from 570 million euros. Shares in the company plummeted by 12.62 percent in morning trade.
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In Asia on Monday, equity markets reversed early gains to trade lower as investors awaited a raft of central bank meetings this week for further trading cues.
In the U.S., stocks were narrowly mixed Monday, following the latest durable goods and factory orders data and after the Dow and S&P 500 turned in four-straight weeks of gains.
The trial of ousted Egyptian president Mohamed Mursi was adjourned following a short court session in a tense Cairo on Monday, putting security forces on high alert but leaving investors unworried about the possibility a renewed wave of protests and instability.
On the data front, manufacturing in the euro zone continued its recovery in October as the region emerges from an 18-month recession, with almost all countries posting growth in the sector. The Markit Manufacturing Purchasing Managers' Index (PMI) came in at 51.3 in October, slightly higher than the 51.1 recorded the previous month. A reading over 50 marks expansion.
(Read More: Manufacturing improves amid euro zone recovery)
In other stocks news, French telecoms firm Alcatel-Lucent announced a capital increase on Monday of 955 million euros; shares closed down by 3.44 percent.
The Co-operative Group said on Monday that it will hand control of its banking arm to investors, including U.S. hedge funds, to plug a 1.5 billion pound ($2.4 billion) capital shortfall. The group said it would still be the biggest shareholder in the Co-operative Bank, retaining a stake of 30 percent in return for contributing 462 million pounds towards the rescue.
Swiss banks UBS and Credit Suisse experience a sell-off on Monday after media reports over the weekend that the country's regulator could be ready to push for higher leverages ratios for the two lenders. Shares in UBS fell 5.27 percent with Credit Suisse down 6.69 percent.
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