Europe closes largely higher; ECB meeting eyed

European equities closed largely higher on Monday, as investors look ahead to Thursday's European Central Bank (ECB) meeting. Meanwhile in Italy, the shares of several banks soared on rumored changes to how shareholders vote.

The pan-European STOXX Europe 600 closed provisionally 0.1 percent higher at 1,409.11 points, with the banking sector helping lead gains.

Shares in several Italian cooperative banks shot up on Monday, after press reports suggesting the government could change rules regarding shareholder voting rights.

After failing to open, shares in Banca Popolare dell'Emila Romagna closed around 8.5 percent higher,Banco Popolare ended roughly 8.3 percent higher and UBI stock closed up around 9.7 percent.

Meanwhile, Denmark's OMXC 20 share index hit a record high, according to Reuters, after the Danish central bank cut interest rates to -0.20 percent from -0.15 percent.

Telecoms giant Telefonica was one of the best performers on the Spanish IBEX, closing up 2.3 percent. This followed reports that Hutchison Whampoa was in talks with Telefonica to buy its O2 network.

Shares of Portugal Telecom slumped by as much as 10 percent, reaching a record low on Monday. Brazilian telecom Oi said on Friday that its merger with Portugal Telecom was "irreversible," dismissing calls by some PT shareholders to undo the deal, Reuters reported.

Global markets are awaiting the ECB's policy decision on Thursday, when it is widely expected to announce a government bond buying plan to stimulate the deflation-hit euro zone.

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In other news, Swiss officials sought to reassure the country on Sunday that a shock decision by the central bank to scrap its cap on the franc would not destabilize the economy, Reuters reported. Its benchmark SMI index closed up around 3.2 percent on Monday.

In the U.S., bond and stock markets were closed on Monday for the Martin Luther King Day holiday. Meanwhile in Asia, Chinese shares tumbled due to sharp declines in the financial and property sectors.The sell-off came a day before the release of China's fourth-quarter gross domestic product (GDP) on Tuesday. The report is expected to show the economy grew 7.2 percent on year, down from 7.3 percent in the third quarter.

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