European benchmarks posted strong gains Monday as M&A activity and a resurgent iron ore price helped to lift the mining sector and oil services firms.

The mining-heavy FTSE 100 led European markets higher from London when it closed 0.38% higher, at 7,371.

London's junior FTSE 250 index, which is comprised of mid-cap stocks, touched a new record high after two of its constituents announced a plan to merge and it received an additional boost from the remainder of its mining exposure.

In Frankfurt, the DAX rose by 0.28% to touch 11,996 while the CAC 40 in Paris added 0.24% to close at 5,005.

In Southern Europe, the FTSE MIB posted a gain of 0.27% in Milan while the IBEX in Madrid slumped by 0.11%.

Miners and anything even remotely exposed to sell-side metal prices saw a boost after iron ore futures rose by more than 6% during the London trading day.

Gold and copper producers Fresnillo (FNLPF) and Antofagasta (ANFGY) both added more than 5% in London. This is while diversified miners Anglo American (NGLOY) , Rio (RIO) and BHP Billiton (BHP) posted gains of between 2.4% and 4.5%.

Mining and steel firm ArcelorMittal (MT - Get Report) and industrials group Thyssenkrupp (TYEKF) topped the board in Paris and Frankfurt with gains of 4.5% and 2.2%, respectively.

Elsewhere across markets, oil and gas producers were found swimming deeply in red ink for the session as Brent and WTI prices sustained last week's losses, although the oil services sector was lifted by an announced merger between Amec (AMFW) and Wood Group (WDGJF) .

Wood Group will buy Amec Foster Wheeler for £2.2 billion ($2.7 billion) in an all-share deal after the commodity rout of recent years drove a two-thirds reduction in the target's share price, which failed to recover in the recent upturn, given lingering concerns over the health of its balance sheet.

Also on merger talk, U.K. home builder Bovis Homes Group (BVHMF) said it has received two separate approaches about a possible takeover from rivals and is still in talks with one of them. Its shares were lifted by more than 10%. 

The company has lagged peers on growth and margins for some time. It is the only U.K. house builder to trade close to is book value, at 1.18 times, while the remainder of the sector trades close to two times book. 

French telecom stocks were volatile throughout the session as investors responded to a report from Les Echos that Bouygues (BOUYF) and Orange (ORAN) have revisited the subject of a consolidation in the sector.

Both sets of shares were up strongly after the opening bell, although they fell later in the session after Bouygues came out with a strong denial of the rumors.