- Basel Committee eases debt-limit rule for banks
- Credit Suisse expects Europe to grow ahead of consensus
- US releases monthly budget statement
FTSE 100: 0.26%
CAC 40: 0.30%
FTSE MIB: 0.66%
IBEX 35: 0.73%
Stoxx 600: 0.23%
European stocks were led higher by banks after global regulators eased a debt-limit rule for lenders.
The Basel Committee on Banking Supervision diluted the proposed leverage ratio, the amount of capital held to loans made, following a meeting in Switzerland yesterday.
The committee said the leverage ratio was adjusted after thoroughly analysing bank data.
Banking stocks including Deutsche Bank, Societe Generale and Barclays gained after the news.
In the US, the government was due to release its monthly budget statement for December.
Today's agenda was thin on economic data and trading releases with investors still digesting last Friday's unexpected fall in US non-farm payrolls for December.
The US jobs report revealed that just 74,000 jobs were added last month, well below the 241,000 recorded in November and analysts' forecast of around 200,000.
It fuelled uncertainty over whether the Federal Reserve will announce a further scaling back of monetary stimulus at its meeting at the end of the month.
In December the central bank reduced monthly bond purchases by $10bn to $75bn following a batch of upbeat economic and jobs reports.
Europe's economy is expected to grow by 1.3% next year, driven by domestic demand in core countries such as Germany, according to a note from Credit Suisse on Monday.
The analyst said it remains "considerably more optimistic than consensus" of gross domestic product (GDP) growth of 0.9%.
"For the euro-area, this should mark a conclusive emergence from crisis and recession, with GDP marking only its third year of positive growth since 2008," Credit Suisse said.
"Importantly, we are expecting GDP to grow in all of the periphery, including Greece. That should, at the margin, make for a more favourable environment for the sustainability of both public and private sector debt."
Peugeot Citroen, UBS
PSA Peugeot Citroen jumped after Sanford C Bernstein & Co. upgraded the French carmaker to 'outperform' from 'market perform'.
UBS climbed after Chief Executive Sergio Ermotti dismissed reports that the lender will spin off its investment-banking business to meet regulators' demands for holding more capital.
Continental rose after the European auto parts maker forecast a fifth consecutive year of record sales.
ICAP declined after Goldman Sachs downgraded the interdealer broker to 'sell' from 'neutral'.
Debenhams jumped after Sports Direct International bought a 4.63% interest in the UK department store.
Alcatel-Lucent rallied following reports the French network-equipment maker is in talks to sell its enterprise business to potential buyers including Unify GmH & Co.
In other news, industrial production in Italy gained 0.3% over the month in November, versus economists forecasts of 0.5%.
The euro was down 0.17% to $1.3647.
Brent crude futures fell $0.187 to $107.050 per barrel, according to the ICE.