The European Union released the names of 15 new people it is targeting for sanctions because of their roles in the Ukraine crisis, a day after the U.S. decided to broaden its own sanctions to include seven Russian government officials and 17 companies with links to Russian President Vladimir Putin.
''We've seen how ineffective these sanctions have been in discouraging Putin or provoking much of a response,'' said Craig Erlam, market analyst at Alpari. ''If all we see in the coming weeks is more sanctions, I think investors will be quite pleased.''
In Europe, the FTSE 100 index of leading British shares closed up 1 percent at 6,769.91 while Germany's DAX rose 1.5 percent to 9,584.12. The CAC-40 in France ended 0.8 percent higher at 4,497.68.
In the U.S., the Dow Jones industrial average was up 0.5 percent at 16,531 while the broader S&P 500 index rose 0.4 percent to 1,877.
Investors have one eye on economic developments later in the week, notably on Wednesday, when the U.S. Federal Reserve wraps up its two-day meeting. The consensus in the markets is that policymakers are expected to further trim the central bank's bond-buying program.
Further U.S. data reports are also in store, with first quarter preliminary economic figures on Thursday and payroll data on Friday. Also out Thursday is Chinese manufacturing data for April, which will provide an update on conditions in the world's No. 2 economy.
Earlier, in Asia, Australia's S&P ASX 200 rose to 5,554.50 early in the session, its highest since June 2008, before reversing course and finishing 0.9 percent lower at 5,486.60.
Trading was thin in Asia because markets were closed for a holiday in regional heavyweight Japan. South Korea's Kospi slipped 0.2 percent to close at 1,964.77 while Hong Kong's Hang Seng Index was up 1.4 percent to end at 22,453.89. The Shanghai Composite index in mainland China climbed 0.8 percent to 2,020.34.
In other markets, the euro was down 0.3 percent at $1.3810 while a barrel of benchmark New York crude rose $1.02 to $101.85.