The British and German stock markets hit record peaks on Monday, driven by hopes that eurozone quantitative easing stimulus, due to be outlined later this week, will bolster economic growth.
Investor sentiment was also given a shot in the arm after China cut interest rates over the weekend for the second time since November, but by afternoon the markets turned down.
London's benchmark FTSE 100 index reached 6,974.26 points in morning trade, its highest intra-day level on record.
In afternoon trading it stood at 6,933.87 points, down 0.18% from Friday's closing level, despite data showing that growth in Britain's manufacturing sector had surged to a seven-month high in February.
Meanwhile, Frankfurt's DAX 30 index rallied to an all-time peak at 11,455.08 points. It later stood at 11,391.73 points, a drop of 0.18% from Friday.
In Paris, the CAC 40 fell 0.94% to 4,904.95 points.
"It was a bright start to March, with the promise of ECB QE and a string of strong data pushing the DAX and the FTSE to new intra-day highs," said Spreadex analyst Connor Campbell.
"The FTSE was able to bask in the eurozone glow whilst also feeling the upshot of its own positive data."
This Thursday, the European Central Bank (ECB) will unveil the details of the bond purchase programme it is kicking off this month.
Greece is also likely to be at the top of the agenda, following the recent eurozone deal to extend aid to the debt-wracked country.
Ahead of the meeting, official data showed on Monday that the eurozone remained mired in deflation territory in February for the third month in a row.
Consumer prices in the 19-nation eurozone were down 0.3% in February, easing slightly from a 0.6% drop in January.
"The ECB announced an open-ended quantitative easing program in January, which we should get more details of on Thursday with the programme due to begin this month," said currency analyst Craig Erlam at trading firm Oanda.
"Whether this will be enough to drag the region out of a deflationary spiral remains to be seen, but with unemployment so high and the deflation being so broad-based ... the ECB has a massive job on its hands."
At its first meeting of the year last month, ECB chief Mario Draghi announced a programme to buy 60 billion euros (RM245 billion) of private and public bonds each month starting in March 2015 until at least September 2016 in a bid to ward off deflation.
Meanwhile in foreign exchange activity on Monday, the euro climbed to $1.1228 up from $1.1195 late in New York on Friday. – AFP, March 2, 2015.