By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- European stocks finished higher Monday, with investors beginning to bargain hunt after last week's selloff, though worries about heightened tension between Ukraine and Russia kept the market's benchmark index in the red for much of the session.

The Stoxx Europe 600 index closed up 0.3% to 329.79, swinging to sustained gains after U.S. stocks opened higher following quarterly results from financial services firm Citigroup Inc. (C) and a U.S. March retail-sales report that each came in stronger than anticipated.

The Stoxx 600 last week dropped 3.1%, the first such decline since the week ended March 14. Stocks worldwide have recently been under pressure, largely stemming from valuation concerns in so-called momentum shares on Wall Street.

Mining shares in Europe moved up in European trading, guided higher as concerns about an intensifying conflict between Ukraine and Russia lifted metals prices, including those for gold which rose more than $8 an ounce. Randgold Resources Ltd. topped the group with its climb of 3.6%, and platinum producer Lonmin PLC rose 3.1%.

But stocks sagged throughout much of the session as pro-Russian activists in eastern Ukraine ignored a Kiev-issued deadline to disarm or face military force. Ukrainian forces were mobilized to move east, The Wall Street Journal reported, in an effort to keep Russia from extending its reach into the country. Ukraine's Interim President Oleksandr Turchynov, however, said he wasn't opposed to the activists' call for a nationwide referendum on regional autonomy. The European Union and the U.S. have threatened to issue more sanctions on Russia.

Russian stocks as tracked by the blue-chips MICEX index pulled back 1.3% to 1,344.86, and the RTS benchmark lost 2% to end at 1,179.97.

In country-specific indexes, Germany's DAX 30 reversed course and closed up 0.3% at 9,339.17, and France's CAC 40 ended higher by 0.4% at 4,384.56.

European stocks were slow to capitalize on signals the European Central Bank is open to considering asset purchases to keep long-term interest rates low. ECB executive board member Benoît Coeuré said Sunday if further monetary accommodation is needed, that "it is reasonable to consider other operations aimed at lowering the term premium." Coeuré's comments followed ECB President Mario Draghi's speech on Saturday, during which he warned again that a further rise in the euro could lead to additional monetary easing in a bid to keep inflation from falling too low.

"The message coming out from the meeting was that a cut in interest rates is likely at first, possibly into negative territory. Only after that would the ECB attempt a quantitative-easing program," said Marshall Gittler, head of global currency strategy at IronFX, in a note Monday. The euro (EURUSD) fell against the U.S. dollar on the prospect of further easing measures.

In addition to inflation levels, the ECB is also watching economic growth, which has been sluggish in parts of the euro zone. Industrial production figures released by Eurostat on Monday showed output rose by 0.2% in February from January, a slight increase that met analyst expectations.

The U.K.'s FTSE 100 index rose 0.3% to 6,583.76, but Glencore Xstrata PLC shares found support early in the session and finished up 2% following the company's $5.8 billion sale of Peruvian copper mine project to a Chinese consortium.

On the Stoxx 600, decliners included PSA Peugeot Citroën , down 6.3% after the French car maker outlined cost reductions and other measures in an effort to return to profitability.

Also, GlaxoSmithKline PLC with shares off 0.6% after a BBC "Panorama" report that the British drug maker is facing a criminal investigation in Poland for allegedly bribing doctors to promote the company's Seretide asthma medication. GSK said in a statement that it disciplined an employee in 2011 over "inappropriate communication" in its Polish program and that it continues to investigate as it cooperates with Poland's anticorruption bureau.

In other movers, Banca Popolare di Milano tumbled 8.5% after shareholders over the weekend rejected the board's governance-reform proposal.

Europe's equity-trading week will be shortened by the Good Friday holiday.

More news from MarketWatch:

Asia Markets blog: Bracing for China data

Gold prices climb as investors dump stocks, eye Ukraine risk

Subscribe to WSJ: http://online.wsj.com?mod=djnwires