European shares closed higher on Monday, with investor sentiment boosted by upbeat Chinese manufacturing data and hopes of central bank action in Europe this week.
According to data out over the weekend, China's factory activity increased at its fastest pace in five months in May. In addition, two surveys showed that home prices fell slightly from the previous month, adding to fresh signs of cooling in the property market.
"While the PMI data doesn't completely dispel China growth concerns, it certainly shows the mild stimulus measures it has taken recently have been gaining traction," said Stan Shamu, market strategist at IG, in a morning note.
Meanwhile, data on Monday showed euro zone factories expanded at a weaker pace than predicted in May, as growth slowed in all nations apart from the Netherlands and Spain.
Germany saw its manufacturing sector expand at its weakest rate in seven months. The country's DAX index closed up 0.2 percent provisionally.
France also posted disappointing results and its CAC 40 index also closed flat.
Traders are awaiting a meeting on Thursday of the European Central Bank, with President Mario Draghi widely expected to announce new stimulus measures.
Economists are split on what policy action Draghi could unveil, with a cut to interest rates touted as well as some form of asset purchases—either in the public or private sector.
In stocks news, shares of Alcatel Lucent closed over 2 percent lower after the telecoms company announced it was issuing two new bonds, with the proceeds going towards paying down existing debt.
Tesco shares closed around 0.9 percent lower on Monday, on reports that the U.K. supermarket chain will release disappointing numbers come Wednesday.
Follow us on Twitter: @CNBCWorld