Miners lift European shares ahead of US CPI, ECB meet

European shares closed higher on Monday, with miners leading gains as prices of most base metals rose, while investors braced for a crucial U.S. inflation print and the European Central Bank's (ECB) monetary policy decision later this week.

The pan-European STOXX 600 index rose 0.3% to close at a near one-week high. European miners jumped 2.4% as prices of most base metals rose on prospects of better demand from top consumer China.

Positive inflation data and more stimulus measures from Beijing added to signs that the world's second-largest economy was stabilising. "The fact that we're escaping deflation is obviously a good sign," said Chris Beauchamp, chief market analyst at IG Group.

"It looks like the narrative about a more positive period for the Chinese economy is beginning to gain momentum." U.S. inflation data, due on Wednesday, could set the tone for global interest rate expectations, while the ECB is widely anticipated to hold its benchmark lending rate at 3.75% when it meets on Thursday.

Leading up to the verdict, the European Commission cut its euro zone growth forecast as consumer demand suffers from high inflation and top economy Germany slips into recession this year. Automakers added 1.1% after Morgan Stanley turned bullish on the world's most valuable automaker Tesla.

The Wall Street brokerage upgraded the U.S. electric maker's stock to "overweight" from "equal-weight". Italy's banks-heavy stock index led gains among European bourses, climbing 1.0% after falling over 1% last week, while UK's FTSE 100 added 0.3%.

Among individual stocks, Vistry Group jumped 12.6% after the British homebuilder said it would merge its affordable-housing business 'Partnerships' with its housebuilding operations. MTU Aero Engines slid 12.1% after the German aircraft engine maker said problems with the turbofan engines at U.S. partner Pratt & Whitney were expected to deal a billion-euro blow to the company's earnings.

AstraZeneca slipped 3.2%, weighing on the STOXX 600. Three analysts and one AstraZeneca shareholder told Reuters they attributed the move to a report in the Mail on Sunday newspaper saying that the drugmaker's CEO had privately told friends and advisers he may leave the company as soon as next year.