European shares advanced on Monday after four sessions of losses, as energy stocks rose tracking global crude prices higher and Danish drugmaker Novo Nordisk led gains in healthcare stocks.

The pan-European STOXX 600 gained 0.6%. The index closed at a six-week low on Friday.

Energy stocks added 1.2% as crude prices firmed on global supply tightening with lower exports from Saudi Arabia and Russia offsetting concerns about demand growth amid high interest rates.

Europe's healthcare index advanced 1.0% as shares of Novo Nordisk added 1.9% after Morgan Stanley raised its price target on the drugmaker.

Weighing on the UK midcap stocks, homebuilders fell 2.5% after residential housebuilder Crest Nicholson cut its full-year profit view.

Separately, an industry survey showed asking prices for homes in Britain fell sharply this month.

European real estate stocks fell 1.0% in its seventh straight session of losses.

China cut its one-year benchmark lending rate as authorities seek to ramp up efforts to stimulate credit demand, but surprised markets by keeping the five-year rate unchanged.

"It is welcome to see some policy action... the question is whether it's enough to really stem what's a very difficult period for China at the moment," said Louise Kernohan, portfolio manager at Newton Investment Management.

China-exposed luxury heavyweights LVMH, Kering and Hermes gained around 1% each.

Euro-zone government bond yields were mixed as investors balanced expectations for a higher-for-longer rates scenario against further signs of weakness from German data and some appetite for safe-haven assets due to concerns about China.

Germany's DAX rose 0.6% even as official data showed German producer prices in July fell more than expected.

Wall Street futures rose after major U.S stock indexes had logged weekly declines.

Investor focus would be now on the Jackson Hole Symposium later this week, where European Central Bank President Christine Lagarde and U.S. Federal Reserve Chairman Jerome Powell are expected to provide clues about the interest rate outlook.

Demant gained 4.0% after JP Morgan upgraded the Danish hearing aid maker to "Overweight" from "Neutral".

Adyen slumped 5.6% after two brokerages downgraded the Dutch digital payments firm's stock after the company missed half-year expectations on Aug. 17.

Saipem jumped 5.4% after JP Morgan assumed coverage on the Italian drilling and construction company with an "Overweight" rating. (Reporting by Shashwat Chauhan in Bengaluru; Editing by Sherry Jacob-Phillips and Rashmi Aich)