Upbeat Chinese and eurozone economic data, combined with receding investor concerns over a US intervention in Syria, sent European equities climbing on Monday, dealers said.
Sentiment was also lifted by indications that British mobile phone giant Vodafone is close to announcing a vast $130-billion (98.5-billion-euro) deal to sell its US wireless joint-venture stake to partner Verizon.
The gigantic buyout, which has sparked hopes of a huge shareholder giveaway, would be the second biggest merger and acquisition deal in global corporate history, according to data firm Dealogic.
The euro slipped to $1.3193 from $1.3218 late on Friday. The dollar climbed to 99.34 yen from 98.17 yen.
On the London Bullion Market, gold prices dipped to $1,392.25 per ounce from $1,394.75.
The safe-haven precious metal had surged to a peak of $1,433.83 last Wednesday as investors sought shelter from Syria worries. That was the highest level since May 14.
London's benchmark FTSE 100 index ended the day 1.45 percent higher at 6,506.19 points, while Frankfurt's DAX 30 climbed 1.74 percent to 8,243.87 points and the CAC 40 in Paris jumped 1.84 percent to 4,006.01 points.
Madrid rose 1.68 percent and Milan climbed 1.84 percent.
"Today, the FTSE has sprinted out of the blocks ... with a combination of improving Chinese manufacturing figures and the reduced likelihood of military action in Syria probably being the largest contributing factors," said analyst Alastair McCaig at traders IG.
He added: "A war against Syria looks less likely for the time being. This has lifted the negative pressure that had been stifling the markets, and as a result all major European markets have surged higher."
Wall Street was closed Monday for a public holiday.
Asian equities mostly rose on Monday after strong manufacturing data indicated a slowdown in China may be coming to an end.
Hong Kong stocks powered 2.04 percent higher and Sydney won 1.03 percent, while Shanghai nudged up 0.07 points and Tokyo increased by 1.37 percent.
Data showed over the weekend that China's official purchasing managers' index (PMI) of manufacturing hit 51.0 last month, up from 50.3 in July and the best reading since April last year.
Anything above 50 indicates growth, while anything below signals contraction. On Monday, HSBC confirmed its own PMI came in at 50.1.
The results follow a slew of recent upbeat data that suggest a slowdown in the world's number two economy and key driver of global growth may have come to an end.
-- Boost from eurozone manufacturing data --
Added to the positive news flow, eurozone manufacturing activity hit a 26-month high in August, confirming other data that shows the bloc coming out of a deep recession.
The PMI for the manufacturing sector compiled by Markit Economics jumped to a final 51.4 points in August from 50.3 in July.
"Optimism over the global economic recovery (is) driving stock prices sharply higher on the first trading day of September," said ETX Capital trader Ishaq Siddiqi.
Easing concerns about a potential Western military strike on Syria also lifted sentiment and reduced worries over crude supplies, sending oil prices lower.
"Now the Syrian worries are left behind, at least for now, European markets are nicely up in green, reversing (the) previous week's miserable performance," added Gekko Markets analyst Anita Paluch.
"It's the beginning of the month (and) China posted positively-received PMI numbers ... which supports hopes for increased pace of global recovery."
In London, the price of shares in Vodafone jumped by four percent on media reports that the group would soon unveil the £84-billion Verizon Wireless deal.
The stock closed the day at 213.65 pence, up 3.59 percent from Friday's closing level.
"The telecoms company looks set for an £84-billion cash injection from the sale of their US Verizon holding, and shareholders are eagerly anticipating a large slice of that cake," added McCaig.
The Chinese data meanwhile bolstered London's mining sector, with Anglo American up 4.16 percent at 1,540 pence, Rio Tinto gaining 3.98 percent to 3,029 pence and Vedanta Resources adding 3.10 percent to 1,198 pence. China is a major consumer of metals.
Global stocks and currencies were hammered last week as dealers bet on a targeted strike in Syria, which they feared would spark a wider regional conflict.
However, Britain's parliament rejected such a move last week, while on Saturday US President Barack Obama broke with decades of precedent to say he would seek approval from Congress for action, meaning nothing was likely to happen imminently.