European shares closed the first session of the holiday week sharply higher but with the end of the year approaching trading volumes remained low.
Banks bounced back after slipping on Friday due to concerns over stricter regulations on how much capital they have to hold in reserve.
However analysts at Deutsche Bank warned the banking sector is likely to underperform next year in a more restrictive regulatory environment.
Commodity shares were up, tracking higher oil and metals prices.
Crude prices have held firm even as Iranian troops partly withdrew from a disputed oil area in Iraq.
The euro remains weak against the dollar due to persistent concerns over Greek debt and expectations the US economy may recover more quickly than the euro zone.
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