European shares climbed on Monday after a market-friendly speech by US Fed Chairman Jerome Powell and signs of progress on a US-Mexico NAFTA trade deal, which drove car stocks higher.
The pan-European STOXX 600 rose 0.3 per cent by 0725 GMT, with Germany's DAX up 0.4 per cent, following new record highs from the US S&P 500 and Nasdaq after Powell kept to the Fed's forecast for "gradual" interest rate hikes.
British markets were closed for a public holiday, making trading volumes especially thin across the region.
The STOXX 600 was through only 6 per cent of its average daily volume in the first 90 minutes of trading - usually the busiest.
Auto stocks were the strongest performers, up 0.9 per cent after US President Donald Trump said on Saturday that a trade deal with Mexico was near.
BMW, Volkswagen, and Daimler rose 1 to 1.6 per cent. Outside trade-driven moves, Metro shares surged 12.5 per cent, reports Reuters.
Lundin Petroleum shares climbed 4 per cent after Norway’s Equinor increased its resource estimate for the Johan Sverdrup oilfield, in which Lundin has a 22.6 per cent stake.
Equinor, which has a 40 per cent stake in the field, gained 0.9 per cent.
Another strong boost to the STOXX came from Swiss drugmaker Novartis. Its shares were up 0.5 per cent after the company received European approval for Kymriah, its gene-modifying therapy for blood cancer.
Shares in Spanish discount retailer DIA rose 4 per cent to the top of the IBEX after a report that Russian magnate Mikhail Fridman has started talks with other shareholders over a possible takeover bid by his LetterOne fund.
In other movers, Germany-listed shares of US electric carmaker Tesla TSLA.TG fell more than 5 per cent in early deals on the Tradegate exchange, indicating the US stock will take a hit after Chief Executive Elon Musk called off his bid to take the company private.
Overall, the STOXX 600 is down 1.2 per cent year-to-date as political developments in Italy and Turkey weighed on the market and particularly banking stocks.