MILAN European shares rose on Monday, led by mining stocks and a spate of dealmaking activity.
Investors stayed cautious ahead of Wednesday's Dutch election and an expected U.S. rate hike, as well as a G20 finance ministers' meeting on Friday.
The pan-European STOXX 600 index closed up 0.4 percent, notching up a fourth day of gains. The basic resources index .SXPP was the biggest sectoral gainer, rising 2.9 percent to snap a seven-day losing streak after copper prices surged on a soft dollar and supply disruptions. [MET/L]
London-listed miners Rio Tinto (RIO.L), Anglo American (AAL.L), Antofagasta (ANTO.L), Centamin (CEY.L) and Fresnillo (FRES.L) all rose by between 4 percent and 5.7 percent.
ArcelorMittal (ISPA.AS) was up 4.7 percent.
Oilfield engineering firm Amec Foster Wheeler (AMFW.L) rallied 11.6 percent, topping gainers on the STOXX 600, after larger rival firm John Wood Group (WG.L) proposed a recommended all-share offer worth 2.2 billion pounds.
The prospect of that deal lifted John Wood shares, which pared gains to close just 1.4 percent higher, and buoyed shares in oilfield services firms across in Europe.
"We see this as a significant transaction for Wood Group, which increases the business's diversity across sectors with the opportunity to realise significant synergies," RBC Capital Markets analysts said in a note.
In other M&A activity, British builder Bovis Homes (BVS.L) surged following an all-share offer from Galliford Try (GFRD.L). Bovis jumped 10 percent, helping Britain's mid-cap FTSE 250 index .FTMC hit a new record high.
Bovis said on Sunday it had rejected an approach from Galliford Try but was still in talks about a possible deal. It said it had also rejected a proposal from Redrow (RDW.L).
British telecoms giant BT (BT.L) was a top European faller, down 3.2 percent, giving back gains from Friday when it announced it would separate its Openreach broadband business, resolving a battle with regulators.
Specialty pharmaceutical company Indivior (INDV.L) fell 3.2 percent after RBC downgraded the stock to 'sector perform' from 'outperform', saying the company's shares would be dominated by litigation in 2017.
Deal-making outside Europe also spurred European stocks.
The $15 billion Intel (INTC.O) takeover of Israeli driverless car tech firm Mobileye (MBLY.N) drove semiconductor makers Infineon (IFXGn.DE) and STMicro (STM.MI) to gain 1.1 percent and 0.2 percent respectively on hopes of more consolidation in the auto tech sector.
Sweden's car safety gear maker Autoliv (ALIVsdb.ST) also gained 1.6 percent on the deal.
The Europe autos sector index .SXAP was the second-highest gainer, up 1.1 percent.
(Editing by Louise Ireland)