Strong gains among mining stocks and an HSBC-led rally in banks lifted European shares in early deals on Monday, putting the region's equities on track to end the month with a slight gain on the final trading day of July.

The pan-European STOXX 600 index was up 0.4 per cent, while blue-chips gained 0.3 per cent. Britain's commodity-heavy FTSE 100 index was up 0.7 per cent, while Germany's DAX also rose 0.2 per cent.

Financials were the biggest boost to the STOXX, with banks up 0.8 per cent, led higher by a 3.4 per cent gain in HSBC , which rallied after the lender posted a forecast-beating 5 per cent rise in first half pretax profit and announced its third buyback in a year.

As the European second quarter earnings season gathers pace, so far around 45 per cent of MSCI Europe firms have reported results, 58 per cent of which have either met or beaten analysts expectations, according to Thomson Reuters data.

This figure is slightly lower for euro zone firms, of which just over half have met or beaten expectations.

Mining firms were also strong performers on the day, jumping 1.5 per cent as copper prices rose on the back of manufacturing data from China, the world's biggest consumer of metals.

British tobacco firms Imperial Brands and British American Tobacco extended their losses from the previous session, down 3 per cent and 0.7 per cent, respectively following Friday's sell-off after the U.S. Food and Drug Administration proposed cutting nicotine in cigarettes.

The STOXX 600 was on track to end the month with a small gain, hampered in July by a stronger euro which has weighed on euro zone firms, especially exporters.

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