Europe Closes Higher on Upbeat Wall Street Start

European shares posted gains to close higher on Monday, after an upbeat start to Wall Street, and better news from Greece and Portugal.

The pan-European FTSEurofirst 300 Index provisionally closed up 1.4 percent at 1,179.31, as the U.S.'s three-day rally continued.

U.S. stocks climbed on Monday, with major averages on track for their third day higher. The Dow Jones Industrial Average jumped more than 100 points. The blue-chip index is within 200 points of reaching its record close of 15,409.39. The S&P 500 and the Nasdaq also advanced.

Europe opened higher, and was further buoyed from news from Greece and Portugal.

The German DAX and French CAC 40 provisionally closed 2.1 and 1.9 percent higher respectively.

(Read More: One Eye on Earnings, the Other on Bonds)

In Europe, European Commission (EC) officials said they had reached agreement with the Greek authorities on the economic and financial policies the country needs to instigate, in order to receive its next tranche of international loans.

Portugal's government made moves to end its political turmoil on Monday, with a cabinet reshuffle agreed by the two coalition partners and the prime minister. Portuguese stocks were 2.25 percent higher on the day.

(Read More: PortugalSuffering From 'Austerity Fatigue': Pro)

In Asia, stock markets outside of Japan widened their losses after sharp falls in the Shanghai Composite, which slid 2.4 percent to a one-week low. News that Beijing will no longer extend credit to sectors that struggle with overcapacity spooked mainland investors, and led to steep declines in property and banks.

(Read More: China Stocks Sink 2.4% on Growth Concerns)

In Egypt, 51 people were killed and 435 injured in clashes on Monday, near the Republican Guard headquarters in Cairo, according to a Ministry of Health spokesperson. Egypt's stock exchange closed 3.5 percent down on Monday.