By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- Europe's broad equity-market benchmark closed higher Monday, hitting a seven-year high as investors weigh up the prospects for quantitative easing from the European Central Bank.

The Stoxx Europe 600 rose 0.2% to 353.18, its strongest close since early January 2008, according to FactSet data. That added to gains of nearly 4% over the past two sessions.

Stocks on Monday reached session highs after French President François Hollande said policy makers at the ECB meeting on Thursday "will take the decision to buy sovereign debt, which will provide significant liquidity to the European economy and create a movement that is favorable to growth."

There are "significant questions" about how the so-called quantitative-easing program will be constructed, Société Générale in a note on Monday.

"The ECB will not likely communicate on any specific volume within its new package of measures, but rather on the effectiveness of its package of measures," the Société Générale analysts said.

The QE package will eventually include 400 billion euros ($465 billion) of private assets, and EUR500 billion to EUR600 billion of sovereign bonds, they projected.

Also in focus in Europe this week is Greece's general election on Sunday, and the latest opinion polls showed anti-bailout Syriza party holding on to its lead ahead of the vote. There's been concern in the market that Syriza will roll back austerity policies if it were to win.

In Athens, shares of Attica Bank SA lost 4.6% and Eurobank Ergasias SA fell 4.1% while Piraeus Bank SA managed to turn higher by 2.1%. The Athex Composite switched back into positive territory, rising 2.7% to 811.78.

Elsewhere on the Stoxx 600, oil and gas shares slipped as crude-oil prices declined. U.S. oil futures (CLG5) fell 2%, to below $48 a barrel in electronic trading, and Brent crude oil pulled back 2% to below $50 a barrel.

J.P. Morgan Cazenove on Monday cut its ratings on major oil companies Royal Dutch Shell PLC and Total SA to neutral from overweight, and BP PLC and Statoil to underweight from neutral. BP gave up 1.1% and Total lost 0.6%. Shell shares ended fractionally lower, while Statoil shares reversed course and rose 1.1%.

The moves came as J.P. Morgan made a fresh round of downgrades to its oil and U.S. gas-price forecasts. "Though we expect Big Oil to react with cuts to all controllable costs and capex, the group starts 2015 a country mile behind the price curve," its analysts said.

Read: Oil prices move lower on Monday as ECB in focus

Elsewhere in European trade, Swiss stocks rose for the first day in four sessions, pushing the Swiss Market Index higher by 3.2% to 8,150.77. The index on Thursday and Friday fell a combined 14.6%, according to FactSet data, after the unexpected decision by the Swiss National Bank to scrap its currency cap.

All components on the SMI closed higher Monday, with a 13.7% jump in shares of investment bank Julius Baer Gruppe , and a 13% rise for plumbing parts maker Geberit AG .

Geberit is one of the companies facing large downside risks to reported earnings, now the Swiss franc's euro cap is gone, Credit Suisse said Monday. Companies with large international sales, a high cost base in Switzerland, major assets internationally and high liabilities denominated in francs will be the ones most affected by the SNB move, said Credit Suisse.

In another central bank move Monday, Denmark's central bank took its deposit rate even further into negative territory, cutting it to negative 0.20%.

On the country indexes, Germany's DAX 30 rose 0.7% to 10,242.35, France's CAC 40 gained 0.4% to 4,394.93, and the U.K.'s FTSE 100 tacked on 0.5% to 6,585.53.

U.S. stock and bond markets were closed on Monday for the Martin Luther King Jr. holiday.

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