European stocks ended with gains on Monday, reversing pre-weekend losses as investors took a new look at upbeat US jobs data that had sparked heavy selling on prospects of a reduction in the US Federal Reserve's stimulus policy.
Investor sentiment was also soothed by easing concerns over Portugal's political crisis, dealers said.
It "appears that markets are coming around to the idea that the idea of tapering may not be such a bad thing despite rising bond yields," Michael Hewson said, an analyst at CMC Markets UK.
London's FTSE 100 index of leading companies ended the day 1.17 percent higher, to close at 6,450.07 points compared with Friday's closing level.
Frankfurt's DAX 30 gained 2.08 percent to 7,968.54 points and in Paris the CAC 40 increased 1.86 percent in value to 3,823.83.
In Portugal, traders also welcomed a last-minute political deal to avert the collapse of the coalition government.
In midday deals on Wall Street, stocks traded mixed with the Dow Jones Industrial Average adding 0.52 percent, the broad-based S&P 500 rising 0.51 percent, while the tech-rich Nasdaq Composite Index shedding 0.07 percent.
European equities had slumped on Friday as better-than-expected US non-farm payrolls data strengthened expectations that the Fed will taper its vast stimulus, while US stocks surged as the solid report spurred also investor confidence in the recovery of the world's biggest economy.
"Stocks in Europe jumped higher... propelled by Wall Street's late advance on Friday as investors digested the solid US monthly jobs report," said ETX Capital analyst Ishaq Siddiqi in London on Monday.
"Reaction to the report was dramatic; stocks on both sides of the Atlantic rose after the payrolls release only to slide as the figure reignited fears that the Federal Reserve now have reason to start tapering stimulus sooner than the market has braced itself for."
In foreign exchange activity, the euro rose to $1.2864 from $1.2832 late in New York on Friday, when it had also briefly dived to $1.2806, the lowest level since May 17.
The Labor Department on Friday said that the US economy added 195,000 jobs in June, well above the consensus estimate of 166,000 jobs.
The news also sparked fresh losses in Asian stock markets on Monday, as investors feared the Fed will now start cutting back its $85 billion-a-month bond-buying that has been credited with fuelling a rally in global markets.
Hong Kong stocks sank 1.31 percent, Shanghai lost 2.44 percent and Tokyo fell 1.40 percent, while Seoul slipped 0.90 percent and Sydney gave up 0.67 percent.
However, European markets staged an impressive rally on hopes that the US economy recovery was gaining traction.
"The continued recovery in equity markets sees the major indices bouncing hard," said analyst Matt Basi at trading firm CMC Markets.
"The willingness of traders to push valuations higher on the back of a strong non-farms number suggests we are back in 'good news is good news' mode despite the looming prospect of Fed tapering, and risk appetites may once more be on the rise."
On the London Bullion Market, the price of safe-haven precious metal gold -- which normally rises in times of economic uncertainty -- slid to $1,235.25 an ounce from $1,272.76 on Friday.
In company news, shares in Renault added 1.26 percent to 55.63 euros on media reports saying the French car maker may sign a deal this month with Chinese auto giant Dongfeng to form a 11 billion yuan ($1.8 billion) joint venture.