FRANKFURT: European shares closed at their highest in nearly a month on Monday, as upbeat economic data tied in with a rally in China's markets on hopes of recovery from a coronavirus-induced slump.

The pan-European STOXX 600 climbed 1.6% on broad-based gains, with Asia-focused lender HSBC jumping 6.6% to lead Europe's battered banks index almost 4% higher.

Other stocks exposed to China, including carmakers, industrials, energy firms and luxury goods makers, gained strongly.

London's FTSE 100 and Spain's IBEX ended 2% higher, while Germany's DAX rose 1.6%.

Europe's STOXX 600 has recovered about 37% since March lows driven in part by large stimulus measures and vaccine hopes, but its still remains about 10% lower for the year.

Among individual stocks, sensor maker AMS climbed 4% on getting EU antitrust clearance for its 4.6-billion-euro ($5.20-billion) acquisition of German lighting group Osram.

Swiss speciality chemicals group Clariant slumped 12.6% to the bottom of STOXX 600 on trading ex-dividend.

Data showing a record rebound in euro zone retail sales in May following a pandemic-driven historic slump in the previous two months, and an unexpected growth in the US services sector last month further bolstered sentiment.

Globally, the appetite for risk rose after mainland China stocks jumped more than 5%, as investors stocked up on cheap funding to invest in an economy that analysts predict will recover faster and better than other major countries battling new waves of infections.