Banking stocks were among the biggest gainers Monday. In particular, investors flocked into Italian banks, given reassurances from the government that the 2019 deficit will not disrespect European fiscal rules. Intesa Sanpaolo, UniCredit and Banco BPM all finished the session up 4.5 percent or more.
Meantime, utilities was Europe's top performing sector, closing up 1.56 percent, as almost all of its stocks ended the day in positive territory.
Looking at individual stocks, RPC soared 18 percent, making it the top gainer on the STOXX 600, after reporting that it is in early discussions with U.S. asset management giant Apollo Global Management for a potential takeover.
A number of stocks fell to the bottom of the STOXX 600, including Ryanair, Glencore and Danske Bank, which all dropped more than 1.5 percent, following broker updates.
In corporate news, U.K. retailer Debenhams moved to reassure investors on Monday with a statement saying its annual profit would meet forecasts as shares in the London-listed small-cap plummeted more than 10 percent. The firm hired auditor KPMG to assist with the improvement of its financial performance.