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The euro rose against the dollar but was down versus sterling.
Oil prices rebounded meanwhile, after slumping Friday to the lowest levels in more than one year.
Bitcoin extended its slide, dropping under US$4,000 to US$3,541.02 - the lowest level for 14 months.
"Italian stocks have been the outperformer in Europe ... on reports that the government may consider reducing its deficit target in a bid to avert a disciplinary procedure in Brussels and a backlash in the markets," noted Craig Erlam, senior market analyst at Oanda trading group.
"The pound is also a little higher ... after (British Prime Minister) Theresa May overcame the first, and smallest, hurdle to her Brexit deal getting over the line."
May convened her cabinet and updated Britain's parliament on the newly-agreed Brexit deal Monday, as she begins the tricky task of selling the plan to her sceptical country.
In Rome, Italy's populist government appears open to reducing its draft budget deficit, fuelling a surge in the Milan stock market on hopes Rome could ease a stand-off with EU officials in Brussels.
"The news has taken pressure off the Italian government bond market, and in turn it has helped Italian banking stocks," said market analyst David Madden at CMC Markets UK.
Milan's FTSE MIB closed the day with a 2.8 per cent gain. London's FTSE 100 climbed 1.2 per cent.
Most Asian stock markets closed higher as investors tentatively picked up cheap stocks, with focus on an expected meeting between US President Donald Trump and his Chinese counterpart Xi Jinping at the weekend that will be watched for signs of a softening in the China-US trade war.
Those gains came despite more selling of shares in Asian energy firms following another collapse in oil prices on Friday.
Wall Street also pushed higher on news that consumers spent heavily on Black Friday, with the Dow climbing 1.2 per cent.
"According to Adobe Analytics, it was a record Black Friday, and the group is also predicted that today, Cyber Monday, will also set a record," said Madden at CMC Markets UK.
The more positive mood comes at the start of a week set to include a speech by Federal Reserve boss Jerome Powell and the release of the bank's last policy meeting minutes, before culminating in a G20 gathering in Buenos Aires.
While the summit will focus on several global issues, the meeting between Trump and Xi will get the most attention, with the economic superpowers engaged in a trade war just as global growth starts to stutter.
Expectations for a deal to end the standoff are low, however.
Oil prices enjoyed a bounce but remain well beaten down after Friday's hammering, which saw WTI sink 7.7 per cent and Brent lose more than six per cent.
The commodity has plunged by about a third in value from four-year highs in early October due to a range of issues, including a global economic slowdown, the trade row, rising crude supplies, softer-than-expected US sanctions on Iran, stuttering business activity in China and a stronger dollar.
All eyes are now on a meeting of the Organisation of the Petroleum Exporting Countries on Dec 6 to see if the cartel will cut output.
Key figures around 1630 GMT:
Milan - FTSE MIB: UP 2.8 per cent at 19,233.45 points (close)
London - FTSE 100: UP 1.2 per cent at 7,036.00
Frankfurt - DAX 30: UP 1.5 per cent at 11,354.72
Paris - CAC 40: UP 1.0 per cent at 4,994.98
EURO STOXX 50: UP 1.3 per cent at 3,176.64
New York - Dow Jones: UP 1.2 per cent at 24,586.13
Tokyo - Nikkei 225: UP 0.8 per cent at 21,812.00 (close)
Hong Kong - Hang Seng: UP 1.7 per cent at 26,376.18 (close)
Shanghai - Composite: DOWN 0.1 per cent at 2,575.81 (close)
Euro/dollar: UP at US$1.1343 from US$1.1331 at 1930 GMT Friday
Euro/pound: DOWN at 88.47 pence from 88.55 pence
Pound/dollar: UP at US$1.2818 from US$1.2805
Oil - Brent Crude: UP US$2.08 at US$60.88 per barrel
Oil - West Texas Intermediate: UP US$1.54 at US$51.96 per barrel
Bitcoin - US$3,541.02