European stocks rose on Monday, with gains in telecoms and banks offsetting a big fall in Unilever, while uncertainty over political developments and the timing of a U.S. interest rate hike kept the dollar in check.

U.S. markets were closed for the Presidents Day holiday, and this restricted activity in Europe and Asia.

Unilever shares fell nearly 9 per cent at one point after U.S. food company Kraft Heinz Co (KHC.O) withdrew on Sunday a proposal for a merger with its larger rival in the face of stiff resistance.

The Anglo-Dutch group's shares were last down 7.4 per cent and were the day's biggest fallers.

Despite that slide, the pan-European STOXX 600 index edged up 0.1 per cent to just below a 14-month high touched last week.

A 3 per cent gain in Deutsche Telekom helped push the index higher after a Reuters report that Japan's SoftBank is prepared to give up control of Sprint (S.N) to Deutsche Telekom's T-Mobile US (TMUS.O) to clinch a merger of the two U.S. wireless carriers.

Royal Bank of Scotland was the day's biggest gainer as shareholders welcomed a plan to scrap the proposed sale of its Williams & Glyn unit.

Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 per cent and back toward a 19-month peak reached last week.

Japan's Nikkei rose 0.1 per cent while China's blue-chip CSI 300 index closed up 1.5 per cent, its biggest gain in six months, after media reports on Friday that pension money may begin flowing into the market as soon as this week.

The dollar dipped 0.1 per cent against a basket of major currencies after U.S. bond yields fell on Friday.

The euro rose 0.1 per cent to US$1.0623 while the yen fell 0.2 per cent to 113.07 per dollar. Sterling rose 0.5 perc ent to US$1.2466.

The dollar hit its highest against the basket for more than a month last week after U.S. Federal Reserve Chair Janet Yellen said it would be unwise to delay raising interest rates, before pulling back on uncertainty over President Donald Trump's policies, particularly on trade.

Minutes of the Fed's latest policy meeting on Wednesday will be examined for any clues to the timing of the next hike, and Fed officials speak at five events this week.

Cleveland Fed President Loreta Mester said in Singapore on Monday she would be comfortable raising rates if the economy maintained its current performance.

POLITICS

The focus in euro zone debt markets was on politics.

French 10-year government bond yields rose after an opinion poll published on Monday showed far-right candidate Marine Len Pen narrowing her centrist and center-right rivals' lead in the final round of the presidential election in May.

This pushed the gap over benchmark German 10-year yields to 84 basis points, its widest since late 2012. It later pulled back to 72 bps.

Yields on safe-haven two-year German bonds hit a record low, at minus 0.85 per cent.

"It all seems to be driven by the move in French bonds after a poll that showed Le Pen's improving fortunes in the second round of voting," Rabobank strategist Lyn Graham-Taylor said.

Among commodities, oil rose, although an increase in the number of U.S. drilling rigs dragged on the price. Brent crude rose 38 cents a barrel to US$56.19.

Copper rose on supply worries after the world's second-biggest copper mine said it could not deliver promised shipment due to export permit problems. Three-month copper on the London Metal Exchange was up 0.7 per cent at US$6,004 a tonne,

Gold edged up 0.2 per cent to US$1,237 an ounce.