The pan-European Stoxx 600 gained 1.2 percent in early deals, with oil and gas shares climbing 2.9 percent to lead gains as all sectors and major bourses entered positive territory. Swedish cloud computing company Sinch was the biggest climber in early trade, adding more than 9 percent. At the bottom of Europe’s blue chip index, Direct Line shares fell more than 13 percent after the British insurer canceled a 50 million pound ($59.6 million) share buyback and cut its profit guidance. The generally positive start in Europe comes amid a more buoyant global climate. In Asia-Pacific on Monday, Hong Kong’s Hang Seng jumped more than 2%, while US stock index futures were modestly higher early Monday morning after a positive end to last week. Friday’s relief rally came as traders bet the Federal Reserve will be less hawkish in its upcoming meeting. The Wall Street Journal reported on Sunday that the central bank is on track to raise interest rates by 75 basis points at its meeting later this month, instead of a larger, full percentage point increase that some analysts had predicted. Recession fears have dominated the trading mood in recent weeks as market participants worry that the Fed’s aggressive action – in an effort to tame decades-high inflation – will eventually push the economy into recession.

Last week, new inflation data showed that consumer prices jumped 9.1 percent in June, a warmer-than-expected increase and the biggest increase since 1981. That, in turn, led traders to bet that the Fed could raise interest rates by a full percentage point at its meeting in late July. Shares in Haleon began trading on the London Stock Exchange’s Main Market on Monday as an independent, listed company after GSK shareholders approved the spin-off of its consumer health business. — CNBC’s Pippa Stevens contributed to this report.