Europe shares pare gains as earnings eyed

It was a positive start to the week for stocks in Europe, although the German DAX pared gains following disappointing economic data from the country.

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IBEX 35
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DAX surges

The pan-European FTSEurofirst 300 closed up around 0.1 percent at 1,349.00, with most major bourses in the region posting minor gains.

German shares played catchup on Monday, after being closed on Friday when a stellar jobs report in the U.S. boosted sentiment and helped shares rally. But despite surging earlier in the day, the DAX index pared gains to close flat after data showed that industrial orders in the country posted the worst fall this August since the height of the global financial crisis.

The poor data from the region's so-called "powerhouse" stoked investor hopes of further stimulus from the European Central Bank (ECB), which in turn gave equities across Europe a slight boost.

Read MoreGerman orders in biggest drop since start of 2009

In France, the CAC ended the day up around 0.11 percent. All eyes are now on the European Union, following reports that Brussels could reject France's new 2015 budget. The Wall Street Journal, citing EU officials, reported that policymakers would not allow the proposed budget deficit of 4.3 percent for next year, in what would be the first display of Brussels' enhanced powers.

U.S. stocks scaled back on Monday gains, with the Dow industrials extending gains after its best day in seven months. Hewlett-Packard rallied after saying it would divide into two companies.

Read MoreStocks fluctuate; consumer discretionary shares hit

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Earnings ahead

Investors are positioning for the upcoming earnings season. The third-quarter reporting period kicks off in the U.S. on Wednesday, with bellwether Alcoa reporting after the market close.

There's also a monetary policy decision by the Bank of England on Thursday and the minutes from the latest Federal Reserve Open Market Committee meeting in the U.S. on Wednesday.

Read MoreCentral banks key to Asia markets this week

Hong Kong unrest continues

In Asia, equities closed mixed on Monday in holiday-thinned trade, with markets in China, Singapore, Malaysia, India and Indonesia closed for a public holiday.

Hong Kong's political unrest remained in focus, as pro-democracy protesters continued to block major intersections on Monday, although the number of demonstrators slipped throughout the evening.

Read MoreLive Blog: Hong Kong protests prepare for crackdown

ICA Gruppen soars

In stocks news, Swedish food retail group ICA Gruppen saw its shares close up over 9 percent after it announced it was selling its ICA Norway unit to Coop Norway.

Shares of Tesco climbed approximately 2.5 percent after the embattled supermarket group announced two new appointments of non-executive directors.

Read MoreTesco boosts board after accounting scandal

Shares of BHP Billiton ended 1.5 percent higher on Monday after the mining company said it was aiming to cut its iron ore production costs.

Meanwhile, Deutsche Bank shares closed around 1.3 percent higher after Reuters reported that the lender had performed well in the third quarter. The bank told CNBC that it was due to report on October 29 and would not be commenting on the Reuters article.

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