Western European stock markets closed Monday's trading higher as investors assessed economic data, geopolitical developments, and corporate news.

The Stoxx Europe 600 index of the region's largest companies rose by 0.02% to 644.62 points.

Britain's FTSE 100 gained 0.42%, Germany's DAX added 1.04%, France's CAC 40 rose 0.4%, Italy's FTSE MIB advanced 0.49%, and Spain's IBEX 35 climbed 0.8%.

German business confidence in the country's economy rose in July to a five-month high of 86.6 points from 85.7 points a month earlier, the Ifo Institute for Economic Research reported. Analysts surveyed by Trading Economics had on average expected a smaller increase, to 86 points.

Lending to households in the eurozone increased by 3% year-on-year in June to 7.22 trillion euros, according to data from the European Central Bank (ECB). The market had forecast an increase of 3.1%. Business lending rose by 4%. Growth in total lending to the private sector — households and non-financial corporations — amounted to 3.9%.

Investor sentiment was supported by hopes for a diplomatic settlement of the conflict in the Middle East, which increased amid a pause in exchanges of strikes between the United States and Iran.

U.S. President Donald Trump said on Monday that Washington was holding talks with Tehran, while noting that U.S. strikes on Iran would resume if the dialogue proved ineffective.

Oil fell sharply on Monday, dragging down shares of oil companies including Shell (down 1.1%), BP plc (down 2.6%), TotalEnergies (down 2%), Eni (down 2.4%), and Equinor (down 3.8%).

Meanwhile, the sharpest declines within the Stoxx 600 were posted by semiconductor sector companies BE Semiconductor Industries (-9.7%), ASML Holding (-8.4%), and ASM International (-7.1%). Their performance was negatively affected by a report from The Information that an unnamed Chinese state-owned company had begun mass production of chipmaking equipment. The publication cited informed sources.

Among the top three gainers in the broad index was Swedish online casino software developer Evolution AB, which increased its market capitalization by 6.7% on news that investment firm Candle Lake had raised its stake in Evolution to more than 30% — above the threshold requiring a takeover offer for the company.

In London trading, mining companies Glencore (-3.4%), Antofagasta and Anglo American (both down 2.2%), as well as energy companies Centrica (-2%), SSE (-1.9%), and National Grid (-1.2%) posted notable losses.

The strongest gain in the FTSE 100 was shown by mobile operator Vodafone (+4.8%), which reported nearly 10% growth in quarterly revenue and improved its full-year profit forecast.

AstraZeneca shares rose 1.7%. The British pharmaceutical company increased net profit by 2% in the second quarter and revenue by 6%; profit excluding one-off factors came in above market forecasts, while revenue fell short of them.

The market value of Ireland's DCC Energy rose 0.9% following reports of its sale to a consortium comprising KKR and Energy Capital at a valuation of 5.75 billion pounds sterling ($7.68 billion), with an additional payment for the disposal of non-core assets.

The market capitalization of Polish retailer Zabka Group fell 9.6%. Earlier, Japan's Seven & I Holdings, which operates the 7-Eleven convenience store chain, announced that it had abandoned plans to acquire a minority stake in Zabka.