Irish stocks underperformed European counterparts on the first day of the trading week as Italy in particular rebounded after its new economy minister promised to keep the country in the euro, dissipating investor fears of a euro zone break up and boosting sentiment after a fraught G7 summit.
Similarly, American investors brushed off tensions over the divisive G7 meeting, when Donald Trump threw efforts to show a united front into disarray after taking aim at Canadian prime minister Justin Trudeau and announcing that he was backing out of the joint communique.
US stocks edged higher ahead of the highly anticipated meeting between Mr Trump and North Korean leader Kim Jong-un.
In the UK investors were cautious as the pound’s weakness resulted from an unexpected decline in UK factory output in April, raising concern that the British economy’s sluggish start to the year was set to continue.
Monday was a light day in volume terms on the Irish stock exchange with the benchmark Iseq overall index closing up 0.25 per cent, behind European peers.
AIB was the most heavily traded stock on the day, and despite spending most of the day in the green, it closed down by 0.45 per cent at €4.868.
Bank of Ireland has a capital markets day on Wednesday and traded strongly, up 0.83 per cent to €7.28.
Budget airline Ryanair also closed up on the day having signed a union recognition agreement in the UK with Unite for cabin crew. The deal, which will recognise union representation for UK-based cabin crew, came as Ryanair closed up 0.47 per cent at €16.13.
Elsewhere, CRH and Smurfit Kappa both closed higher on the day, up 1.15 per cent and 0.3 per cent respectively.
Yew Grove Reit, which traded for the second day on Monday, fell marginally, by 0.19 per cent, to €1.07.
The Ftse 100 index ended up 0.7 per cent, helped by gains in big international companies such as British American Tobacco and Diageo, up 1.2 and 2.4 per cent respectively.
Shire turned lower after Reuters reported that a group of Takeda Pharmaceutical was building support to block the $62 billion acquisition of the London-listed drug maker. Shire shares fell 0.1 per cent.
Among mid caps, Inmarsat was a stand-out gainer, surging 12.6 per cent. The satellite firm rejected on Friday a takeover approach from US firm EchoStar, saying it significantly undervalued the company.
Euro zone banks rose 3 per cent, helping the pan-European Stoxx 600 gain 0.8 per cent, while Italy’s Ftse MIB jumped 3.4 per cent and Spain’s Ibex 1.6 per cent.
Italian bank stocks climbed 5.9 per cent, their biggest one-day gain in more than 13 months, as bond yields fell, with relieved investors buying back into Italian assets.
Italian banks Unicredit and Intesa Sanpaolo led the European index, both up more than 6 per cent. Italgas and Poste Italiane, which had been weighed down by political uncertainty, also made strong gains.
Swiss voters' rejection of a campaign to radically alter the banking system also helped boost sentiment. Switzerland's stock index was up 1.3 per cent with banks Credit Suisse and UBS leading gains. Swiss consumer goods heavyweight Nestlé rose 1 per cent.
The biggest percentage gainer on the S&P 500 was Sempra Energy, which surged 15 per cent after two shareholders, including Elliott Management, urged a strategic review of the US utility's business.
Medical device maker Boston Scientific surged after the Wall Street Journal reported that rival Stryker Corp had made a takeover approach for the company. Shares in Stryker were down.
Finally, Facebook rose after Keybanc analysts said Instagram could be the company's primary growth driver.
– Additional reporting: Reuters