Encouraging developments around a coronavirus vaccine spurred bets of a faster economic revival globally.
The pan-European STOXX 600 index rose 0.4% and hit a fresh high since late February.
With energy and banking sectors leading gains.
The benchmark index has gained nearly 40% from its March lows, helped by a flood of stimulus measures.
Travel stocks were a big winner on Monday.
Holiday firm TUI saw an 8 percent rise.
While easyJet was up over 5 percent.
But gains remain capped as investors weigh risks of rising infections against hopes of a vaccine supporting a recovery.
Robert Halver is head of capital markets at Baader Bank:
"On the one hand, there are the lockdown restrictions, which will be extended, but also the hope for a vaccine. On the other hand, the economy is in hibernation but Spring is supposedly going to be particularly beautiful. Markets are torn between the two."
On Monday AstraZeneca said its COVID-19 vaccine, developed along with the University of Oxford, could be around 90% effective under one dosing regimen.
The company's shares however slipped 2 percent.
Traders attributed the drop to its vaccine showing lower success than rivals such as Pfizer.
Regional stocks were also buoyed by hopes of a swifter economic recovery, after the British government said it was working to ease restrictions over Christmas.
That helped UK's FTSE 100 index gain 0.3%, along with hopes of a post Brexit-trade deal with the European Union.