European shares extended gains Monday, led by banks, on optimism euro zone leaders will unveil fresh solutions to help resolve the region's debt crisis, ahead of a summit next week.

At 2:54 p.m., the FTSEurofirst 300 <.FTEU3> index of top European shares was up 3.5 percent at 939.26, and had hit a day's high of 939.96 points.

Technical factors added weight to the move as the index had sold off nearly 8 percent in the preceding two weeks.

Banks were among the top gainers with the STOXX Europe 600 Banking Index <.SX7P> up 5.7 percent.

(Reporting by Brian Gorman)