European markets kicked off the final week of the first quarter on a positive note this morning after a surprise jump in business confidence from the region's largest economy. The closely-watch IFO index of German business sentiment rose to an 8-month high, helping to lift shares across Europe, including the UK's Benchmark FTSE 100.

Some of the market optimism may be tested in the coming days, however, as concerns about the fate of Europe's indebted nation's continues to weigh on investor sentiment.

Italy's Prime Minister Mario Monti spoke to those concerns at a weekend conference in Cernobbio, warning that Spain's financial situation could spark contagion in the markets if not isolated as part of the region's efforts to beef-up the 500 billion euro bailout fund.

That task will be put to the test Thursday as Spain faces its first general strike under Prime Minister Mariano Rajoy. Union Leaders are planning a nationwide protest over plans to ease labour market laws and cut public spending.

EasyJet is one of the biggest gainers on the UK market today after the discount carrier trimmed expectations for its first half loss and said it had nearly a third of its seat capacity already booked for the second half of the year. Shares in group surged more than 7.5% in the morning session to trade at the highest level since February.