Sawt Falasteen - Record London close as oil prices drop on easing Middle East fears

London led the way in Europe, with its FTSE 100 index gaining 1.6 percent to hit a record closing high of 8,023.87 points. The benchmark index also benefited from a weaker pound since the Bank of England is seen cutting interest rates soon as UK inflation cools.

Frankfurt and Paris closed up 0.7 and 0.2 percent respectively.

Wall Street moved cautiously ahead, with the tech-heavy Nasdaq 0.4 percent in the green two hours into the session after tumbling on Friday partly due a poor response to Netflix earnings. The Dow rose 0.2 percent and the S&P 500 added 0.3 percent.

In Asia, Hong Kong's Hang Seng stocks index closed with a gain of 1.8 percent.

Oil prices fell, with the international benchmark, Brent, slipping back 0.8 percent to $86.59 per barrel.

"The week starts with a relief rally in equities following a calm weekend on the geopolitical scene," noted Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

With Iran downplaying the recently-reported Israeli attack on the country, which came days after a drone and missile strike on Israel by Tehran, tensions between the regional foes appeared to have cooled.

While the situation remains tense, the lack of escalation over the weekend provided traders with an opportunity to pick up equities after losses last week.

Investors will turn their attention this week to earnings updates from more US giants, including Google parent Alphabet, Tesla and Microsoft.

They are also setting their sights on US economic data.

"What this week brings will depend largely on what the earnings and economic calendars bring -- and they will be bringing a lot," said Briefing.com analyst Patrick O'Hare.

US first-quarter growth figures are due out on Thursday.

The personal consumption expenditures (PCE) index, the Federal Reserve's preferred gauge of inflation, will be released on Friday.

The reading could play a major role in the central bank's decision-making on US interest rates, and comes after successive months of above-forecast consumer price index figures.

Recent US inflation data has dented hopes for a cut in June, and traders have scaled back their outlook for how many the Fed will make this year.

"If core PCE exceeds expectations, this will mean elevated interest rates are likely for longer in the US," said Fawad Razaqzada, analyst at City Index and FOREX.com.

Traders have lowered the odds of a June rate cut from 70 percent last month to 15 percent now, he said, adding that they now see a 66 percent probability of a cut for September.

"This means that traders are now looking beyond the summer for the first rate cut," Razaqzada said.

Elsewhere Monday, bitcoin firmed following the long-anticipated "halving".

Friday saw the halving of reward for operating bitcoin, a much-anticipated step designed to limit production and boost the world's biggest cryptocurrency.

The dollar, meanwhile, rose across the board, while gold came off the boil.

- Key figures around 1545 GMT -

London - FTSE 100: UP 1.6 percent at 8,023.87 points (close)

Paris - CAC 40: UP 0.2 percent at 8,040.36 (close)

Frankfurt - DAX: UP 0.7 percent at 17,851.39 (close)

EURO STOXX 50: UP 0.4 percent at 4,935.46

New York - Dow: UP 0.2 percent at 38,059.98

New York - S&P 500: UP 0.3 percent at 4,984.30

New York - Nasdaq Composite: UP 0.4 percent at 15,344.29

Tokyo - Nikkei 225: UP 1.0 percent at 37,438.61 (close)

Hong Kong - Hang Seng Index: UP 1.8 percent at 16,511.69 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,044.60 (close)

Dollar/yen: UP at 154.77 from 154.64 yen

Euro/dollar: DOWN at $1.0644 from $1.0658

Pound/dollar: DOWN at $1.2338 from $1.2373

Euro/pound: UP at 86.27 pence from 86.11 pence

West Texas Intermediate: DOWN 0.6 percent at $82.63 per barrel

Brent North Sea Crude: DOWN 0.8 percent at $86.59 per barrel

burs-lth/cw/rlp

V.AbuAwwad--SF-PST