European shares closed higher on Monday, with Vodafone leading the gains, as a deal to sell its stake of Verizon Wireless looked set to be completed. Also strong Chinese and European factory data boosted market hopes that the global economy is growing out of stagnation.
(The Vodafone-Verizon deal was completed shortly after the close of European trade. Read More: Verizon, Vodafone agree to $130 billion deal)
The FTSEurofirst 300 Index provisionally closed up 1.7 percent at 1,215.85 points, with basic resources and telecoms leading gainers, closing up roughly 3.05 percent and 2.60 percent respectively.
Investor sentiment was also boosted by a delay to any possible military strike against Syria, which last week caused a spike in the price of oil, and a move to less risk-weighted assets.
On Sunday, U.S. President Barack Obama and his top aides launched a full-scale political offensive to persuade Congress to approve a military strike against Syria, but faced a struggle to win over skeptical lawmakers from both parties. Congress will only debate a Syria strike when it returns from its summer recess on September 9, delaying any possible response to a chemical gas attack that is believed to have killed hundreds of civilians last month.
Meanwhile, U.S markets were closed for the Labor Day holiday on Monday.
In stocks news, shares of British firm Vodafone rose by 3.37 percent. Its deal to sell its 45 percent stake in Verizon Wireless to Verizon Communications for £130 billion looks to be nearing an end.
The deal also sparked rumors that Telecom Italia could be part of a sector merger wave, although no buyer has been confirmed. Shares were higher by 3.87 percent.
The European telecom sector was also buoyed by an upgrade from Goldman Sachs, who lifted the sector to neutral from cautious .
Upbeat factory data
HSBC's index of Chinese manufacturing activity crossed the key 50-level for the first time in four months in August, in line with last week's flash reading. The data followed the government's more bullish official purchasing manager's index (PMI) released at the weekend. It hit a sixteen month high in August.
In addition, data released for the euro zone showed manufacturing rose at its fastest pace since May 2011. A survey carried out by Markit said the manufacturing PMI jumped to 51.4 in August, from 50.3 in July.
In the U.K., activity in the country's manufacturing sector expanded at its fastest pace in two-and-a-half years during August, another clear indication that the economic recovery is gathering pace.
In Germany, Chancellor Angela Merkel failed to score a clear victory over her main election rival Peer Steinbrueck during a televised pre-election debate on Sunday, according to viewer polls. She remains the strong favorite win the September 22 election, however.
Also in Europe, Italy introduced a levy on high-frequency and equity derivative trades on Monday, the second stage of a process started earlier this year to tax financial transactions.
(Read More: Italy launches taxon high-frequency transactions)
In other stocks news, shares of French advertising agency Havas bounced by 5.88 after Barclays rose its price target on the company.
Morgan Stanley downgraded Bwin.Party Digital Entertainment to equal weight from overweight, and cuts its price target to £1.40 from £1.80, arguing that declining revenues in all products and countries had undermined their confidence. Shares were down 2 percent.
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