European markets closed higher Monday afternoon as investors digested news that the U.S. Senate narrowly passed a major tax bill over the weekend.
The pan-European Stoxx 600 ended the day's trading up 0.91 percent, with major bourses and all sectors bar technology in positive territory.
The construction and material sector led the gains, up nearly 1.6 percent, followed by the autos and chemicals sectors. Europe's auto stocks, which have a large exposure to the U.S., rose 1.56 percent Monday afternoon after the U.S. Senate passed a tax package delivering significant fiscal stimulus.
Looking at individual stocks, Switzerland-based fintech firm Temenos led the Stoxx 600, followed by U.K. media company Daily Mail and Italian eyewear firm Luxottica.
Denmark's largest insurance firm Tryg said it had agreed to buy unlisted competitor Alka Forsikring for $1.31 billion on Monday. The company said it was looking to bolster its presence in the property and casualty insurance markets. Tryg's shares closed over 3 percent higher.
Meanwhile, Dialog Semiconductor slumped to the bottom of the benchmark Monday, with its shares ending the day's trading over 24 percent lower. The German microchip maker said its top customer Apple could soon opt to build its own power-management chips instead. However, Dialog Semiconductor said it should not lose its Apple power chip business in 2018.
In Europe, the U.K. and the European Union have as yet failed to agree on the terms of Brexit, as announced in a press briefing held by U.K. Prime Minister Theresa May and European Commission President Jean-Claude Juncker in Brussels, Belgium. But, both politicians were positive on negotiations, with Juncker saying that he felt that sufficient progress could be made ahead of a broader EU summit later this month.
Britain and the EU have reportedly agreed to avoid a hard border between the U.K. country of Northern Ireland, and its neighbor — the separate EU member state of the Republic of Ireland, for whom the U.K. is a major trading partner.
Stateside, U.S. markets were buoyant with the Dow 230 points higher, boosted by the Senate narrowly passing a Republican bill to overhaul the country's tax system over the weekend. But, the GOP still needs to overcome obstacles in order for the Senate and the House to craft a joint bill, with Republicans hoping a deal will be achieved by Christmas.
—CNBC's Jacob Pramuk contributed to this report