The Stockholm stock exchange started the second half of the year on an upward trend. The broad OMXS index rose 0.6 percent.
Monday's rise came after an unexpectedly low German inflation figure and as the market positioned itself after the first round of France's parliamentary elections over the weekend.
Among the most traded stocks in the OMXS30 index, interest-rate sensitive papers such as real estate company SBB rose 7.9 percent, and cloud service company Sinch rose 3.7 percent.
The major banks also performed strongly, with a 3.2 percent rise for Nordea.
Intrum's share rose 3.2 percent after the financially strained debt collection company reported that it had raised SEK 7.2 billion in net liquidity from the sale of parts of its investment portfolio.
A Sigh of Relief
Investors across Europe breathed a sigh of relief as the far-right party National Rally (RN) in France does not appear to be gaining a majority in the new parliamentary elections. The Paris stock exchange's CAC40 index started the day up nearly 3 percent, but the rise had been dampened to 1.4 percent by the close.
Indexes on the London and Frankfurt stock exchanges also rose, albeit less than in Paris.
On the currency market, the euro, which had been under pressure, rose against the dollar, while the gap between French and German bond yields narrowed.
An unexpectedly low German inflation rate in June, according to preliminary figures, contributed to the positive sentiment.
Government Financial Problems
Leading up to the first round of the French parliamentary elections on Sunday, the euro had fallen and French interest rates had risen to crisis levels due to market concerns about worsening government financial problems for the country, which already struggles to manage its large budget deficits and may face a turbulent political situation with a more populist government after the election.
The second and decisive round of the French parliamentary elections will be held on Sunday.
The OMXS index has risen 8.6 percent since the start of the year with Monday's rise.
