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Europe shares close at 7-week high on Portugal relief

European shares pared gains on Monday, but still closed at seven-week highs, boosted by an upbeat earnings report from Swiss bank UBS.

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FTSE
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DAX
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CAC 40
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IBEX 35
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The pan-European FTSEurofirst 300 index closed unofficially 0.2 percent higher at 1,211.33 points. Both London's FTSE 100 and the German Dax closed narrowly lower, while the French Cac provisionally closed 0.40 percent higher.

Earlier in the European trading session, shares moved higher after snap elections in Portugal were ruled out, in attempt to overcome the country's political impasse.

Portugal's PSI 20 Index unofficially closed 2.41 percent higher, after President Anibal Cavaco Silva ruled out a snap election, and said he wanted the coalition government to stay in place in order to keep Portugal's international bailout on track.

"We have given all assurances to the president that we can have a stable government...that we can finish the [bailout] program," Cecilia Meireles, member of the right-wing CDS-PP party, told CNBC on Monday.

(Read More: Portugal stocks higher as government vows to battle on)

Meanwhile, a series of earnings releases boosted stocks in Europe, particularly in the banking sector. Shares of UBS closed 2.50 percent higher in heavy trade, after it posted a net profit for its the second quarter that beat market expectations.

(Read More: UBS jumps on deal to settle US mortgage debt lawsuit)

Shares of Julius Baer also rallied after it reported a 25 percent jump in adjusted net profit in its first half. Plus, shares of Dutch engineering firm Philips also pushed higher after it reported higher-than-expected second-quarter results, despite a major writedown.

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