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European markets finished mostly in the red on Monday despite a strong recovery in oil prices and mining stocks as investors digested the latest corporate news and fresh economic targets from China.

The pan-European STOXX 600 index ended down off some 0.25 percent, with most sectors closing in the red.

London's FTSE, France's CAC and Germany's DAX were all off between 0.3 and 0.5 percent by Monday's close.

European Markets: FTSE, GDAXI, FCHI, IBEX

In markets overseas, Asia finished mixed, following China's new economic targets, while U.S. stocks struggled for gains at Europe's close as investors awaited indications on monetary policy from across the globe.

On Saturday, China's premier Li Keqiang announced a growth target of 6.5-7 percent this year at the annual National People's Congress, down from last year's "about 7 percent". Other targets included a consumer price index growth target of around 3 percent and a budget deficit at 3 percent of gross domestic product (GDP), Reuters reported.

Read More Iron ore rally short-lived, prices to come off: Goldman Sachs

On the back of China's news and a solid recovery in metal prices, basic resources bounced back in late trade with Glencore finishing 6.7 percent up, and Antofagasta jumping 7.6 percent. BHP Billiton, Rio Tinto and Anglo American all posted gains of more than 3 percent.

Fresnillo and Randgold Resources, however, closed lower despite silver and gold prices posting solid gains. The sector closed up some 3 percent.

Investors in Europe are also eyeing the European Central Bank's upcoming policy meeting, due to take place this Thursday, with several market watchers expecting some form of further stimulus to be announced.

Ahead of Thursday's ECB event, U.S. investors will be keeping an eye out for any comment on the U.S.' current economic state, as Federal Reserve Vice Chair Stanley Fischer and Fed Governor Lael Brainard are expected to deliver speeches on Monday in Washington.

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Brent at $40; Seadrill surges 60%

The oil price continued its march higher on Monday with Brent crude hitting a 2016 high of above $40 during trade, after Genscape reported a smaller build in stockpiles at the Cushing, Oklahoma delivery hub for U.S. crude, according to Reuters.

At Europe's close, both Brent and U.S. crude were up 3.5 percent, with Brent hovering at $40.13 per barrel, while U.S. crude was trading around $37.23. This sharp boost in prices drove stocks higher, with Saipem and Subsea 7 both closing sharply higher, up over 7 and 3 percent respectively.

Shares in offshore driller Seadrill led European benchmarks, surging over 60 percent, after its CEO said short-sellers were starting to panic at the possibility Seadrill's refinancing plan would succeed, Reuters reported.

Most stocks recovered from earlier losses, however BP closed in the red.

Banks under pressure

Banks were once again in focus on Monday, with the sector off 1 percent by the close. Germany's Commerzbank closed slightly higher, after it named retail banking head Martin Zielke as its next chief executive from May 1.

Several Italian banks came under pressure on Monday on continued concern over the portfolio of non-performing loans held by the lenders. The likes of Banco Popolare and Intesa Sanpaolo were both closing trade sharply lower.

Analysts said that the low inflation environment in Europe is hurting the banks, but overall the sector looks cheap for investors.

"The difficult here is that margins are continuing to be squeezed. You're in a low inflation environment, it's not a solvency risk, it's just more a malaise in terms of a low earnings outlook and the potential risks around that," Bill O'Neill, head of the U.K. investment office at UBS Wealth Management, told CNBC.

"One way or another, the sector is cheap."

EDF tanks after CFO resigns

In other news, shares in EDF sunk near to the bottom of Europe's benchmarks after the company's chief financial officer, Thomas Piquemal, resigned following a disagreement over a project to build new nuclear reactors in the U.K. Shares slumped over 6.5 percent.

Shares in insurer Old Mutual surged almost 7 percent after it said it was considering all options for a strategic review following a report by Sky News which suggested the firm was planning a £9 billion ($12.7 billion) break-up.

Hotel groups Accor and Intercontinental Hotels Group both ended sharply lower after Citi cut its outlook on the stocks.

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