Europe Markets

Europe shares close higher as Greek fears abate

European shares closed higher on Monday after trading in and out of the red during the trading session, amid growing concerns about the future of cash-strapped Greece.

Greek stocks reversed direction to close 1.6 percent higher, helping guide the Euro Stoxx 600 Index to a positive close. The pan-European index ended around 0.4 percent higher.

The U.K.'s benchmark FTSE 100 ended provisionally 0.1 percent higher, trumped by the French CAC, which closed unofficially 0.3 percent up.

The real outperformer was the German DAX, however, which closed provisionally 1.3 percent higher, boosted by a rally in shares of Volkswagen. Its stock closed over 3 percent higher after a target price upgrade by Deutsche Bank, according to Reuters.

Greek and broader European stocks turned higher on reports that Greece was being "more constructive" in talks, according to Reuters.

This came after a spokesman for the Greek government said the country needed a deal agreement with creditors by the end of the month, as fears grow that the country is on the verge of bankruptcy.

Meanwhile a letter from the country's officials to the International Monetary Fund revealed that Greece came close to defaulting on a 750 million euro ($860 million) repayment last week, according to a report by Greek daily newspaper Kathimerini that was confirmed by the Financial Times.

"The day of reckoning is coming for Greece," Michael Hewson, chief market analyst at CMC Markets UK, told CNBC.

"We've been worried about an end-game for some time and the letter to the IMF shows just how serious the position in Greece is."

Read MoreGreece's 'endgame' in sight; bond yields soar

The euro declined to around $1.135 on Monday.

Fears about Greece also weighed on U.S. stocks on Monday, which traded in a narrow range. However, both the Dow Jones Industrial Average and the benchmark indexes high record highs during the session.

In Asia, a new trading week ushered in another mixed trading session, as investors' confidence wavered following data that showed further declines in China's house prices.

Aveva rallies

Back in Europe, shares of Aveva soared to close almost 10 percent higher on reports from the Sunday Times newspaper of a possible takeover for the company.

Volvo shares gained as much as 3.5 percent, with analyst upgrades from Citigroup and JPMorgan on Monday.

Shares of BHP Billiton slipped 5 percent after a cautious first day of trading for its spin-off, South32, before rebounding to close 2.4 percent higher.

Read MoreSoft market debut for BHP spin-off South32

Shares of Thomas Cook closed around 3.2 percent lower, with the U.K.-listed holiday firm in the spotlight over the insurance payment it received after two children died in one of its hotels in 2006.

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