London shares closed higher on Monday as Wall Street gained in anticipation of strong profit figures when the US second quarter earnings season gets under way this week.

The benchmark FTSE 100 index added 74.55 points or 1.17 percent to 6,450.07.

Alcoa kicks off earnings season after the market closes Monday. Leading banks JPMorgan Chase and Wells Fargo report Friday.

Current forecasts suggest profit growth of just 0.8 percent by US companies and revenue growth of only 1.2 percent from S&P 500 companies, said analyst Patrick O'Hare. The outlook is better for the second half of 2013.

"What the market will be listening attentively to is whether they are citing improving conditions in the US as an offset," O'Hare said.

Investors were also cheered by the prospect that the eurozone finance ministers, meeting on Monday evening, would approve the payment of 8.1 billion euros in bailout funds to Greece, dealers said.

The troubled country's lenders -- the European Union, the European Central Bank and the International Monetary Fund -- said an audit showed that Greece's reform efforts were "broadly in line" with expectations.

However, Max Cohen, a financial sales trader at Spreadex, cautioned: "With (German Chancellor) Angela Merkel still intent on not looking weak at home, Berlin is unlikely to support a full disbursement to Greece."

"Despite the fact that European indices have enjoyed a short period of gains, with the FTSE 100 trading over 450 points higher from two weeks ago, the worryingly slow recovery in some of the peripheral nations remains prominent in the minds of policymakers," Cohen said.

State-rescued Royal Bank of Scotland and Lloyds group were among the biggest gainers in London, amid reports that institutional investors are keen to snap up the government's 33 percent stake in Lloyds. RBS added 4.37 percent to 288.80 pence and Lloyds climbed 3.82 percent to 67.10 pence.

Among the few modest fallers, specialist distributor Rexam led the way, easing 0.66 percent to 479.90 pence.

A lively week is in prospect for London stocks, with a slew of corporate news expected, starting on Tuesday with an update from Marks & Spencer on its first quarter to June as the High Street stalwart stages its annual general meeting.

Housebuilders Barratt, stockbroker ICAP and Primark owner Associated British Foods are among other British companies which have scheduled statements for this week.

On the currency markets,sterling recovered a bit to $1.4932 at 5:20 pm from $1.4901 on Friday but eased to 1.1611 euros from 1.1623 before the weekend.