European bourses closed higher on Monday as banks rallied on the news that Italy had reached a deal to wind up two ailing regional banks.
The pan-European Stoxx 600 ended up by 0.37 percent with most sectors and major bourses in positive territory.
Europe's food and beverages sector surged 2 percent on Monday. Nestle led the gains after activist investor Daniel Loeb's Third Point LLC unveiled a more than 1 percent stake in the Swiss firm on Sunday, Reuters reported. The 3.28 billion Swiss francs ($3.4 billion) stake is the largest ever taken by the hedge fund. Nestle shares moved up more than 4 percent.
Italian authorities said Sunday they would be prepared to spend as much as 17 billion euros as part of the closure of two regional banks, in a deal which is set to transfer the banks' best assets to Intesa Sanpaolo for a nominal sum. The move comes two days after the European Central Bank (ECB) warned that Banca Popolare di Vicenza and Veneto Banca were likely to fail. Intesa Sanpaolo shares were higher by 3.5 percent on Monday.
Oil prices rose for a third consecutive session on Monday, although a relentless increase in U.S. drilling activity appeared to cap gains. Brent crude traded at around $45.82 a barrel while U.S. crude was at $43.40.
Meanwhile, in the U.S. markets were higher boosted by banks and tech stocks. The Dow Jones industrial average rose 62 points, with Apple contributing the most gains. The Nasdaq composite outperformed, rising half a percent.
On the data front, German businesses were feeling more positive than ever in June, according to a closely-watched business survey. The Institute for Economic Research's overall business climate index unexpectedly improved to hit 115.1 in June, up from the previous record high of 114.6 in May.
In the U.K., the governing right-wing Conservative party secured a so-called supply and confidence agreement with the Democratic Unionist Party (DUP) on Monday. The deal, which comes after two weeks of talks, will see the DUP support Prime Minister Theresa May's minority government.
Brexit Secretary David Davis outlined Britain's plans on rights for citizens of other EU countries after the U.K. leaves the bloc.