European shares rose for a sixth straight day on Monday, the longest winning streak in five months, on optimism for the economy and as China's decision not to raise interest rates boosted miners.

The pan-European FTSEurofirst 300 <.FTEU3> index rose 0.3 percent to 1,129.33 points, its highest close since September 2008. It was the index's longest winning run since July.

There's a bit more confidence about the cyclical outlook, Bill Dinning, head of strategy at Aegon Asset Management in Edinburgh, said.

You've seen some of the worst fears in Europe ... (such as) the sovereign crisis ... put on hold, though I think it will come back. There's been a general drift-up of expectations in terms of economic forecasts, especially for Germany.

Cooper hit a record high and other metals gained, boosted by trong data from top consumer China. Miners to benefit included BHP Billiton , Fresnillo , Kazakhmys , Rio Tinto and Vedanta , up between 1.9 and 4.1 percent.

China's central bank raised reserve requirements for banks instead of benchmark interest rates, easing concerns that a tightening of its monetary policy could lead to a slowdown in one of the major growth engines of the global economy.

The sector was boosted by a weaker dollar <.DXY>, which also supported oil prices, with Brent well above $91.

Among the bigger oil companies, Total and Repsol rose 1.3 and 0.9 percent respectively.

Takeover activity boosted investor sentiment, especially in the oil services sector.

General Electric Co reached a deal to buy Wellstream Holdings Plc by raising its bid for the British oil drilling pipemaker by 6 percent to some 800 million pounds ($1.26 billion). Wellstream rose 5.8 percent while France's Technip added 3.3 percent.

Wood Group rose 6.7 percent after making the latest in a long line of acquisitions, agreeing to buy unlisted Scotland-based rival PSN for $955 million, including $325 million debt.

The European benchmark index is up 75 percent from a lifetime low in March 2009. Several major economies have emerged from recession, helped by stimulus from governments and central banks worldwide.

There's a good chance corporate profitability will continue to be strong. Companies will take that confident outlook and hire more people, said Dinning.

Across Europe, Britain's FTSE 100 <.FTSE>, Germany's DAX <.GDAXI> and France's CAC 40 <.FCHI> ended the day between 0.3 and 0.9 percent higher.

Confidence over the pace of economic recovery in the United States helped bolster positive sentiment following upbeat economic data last week, including strong U.S. consumer confidence and an improving jobs outlook.

Trading volumes, however, were thin as the year-end holiday period draws closer.

... I don't think there are too many investors willing to take big risks in the remaining days of the year. It could mean that people are going to secure their profits. The market could become pretty volatile in the coming days due to lower volumes, said Koen De Leus, strategist at KBC Securities.

DRUGMAKERS TAKE HIT

Pharmaceutical stocks were mostly lower. French drugmaker Sanofi-Aventis shed 0.6 percent after it extended its snubbed $18.5 billion cash bid for U.S. biotech group Genzyme by six weeks, buying time to persuade its reluctant target to talk.

Novartis fell 0.8 percent; Bayer was 1.4 percent lower.

Back among the winners, French carmaker Renault rose 2.2 percent after Le Figaro said the firm would post record 2010 vehicle sales and profits, and unveil an operating margin target of 4 to 5 percent in 2013.

Within the sector, Peugeot

and Porsche

gained 2.4 and 1.8 percent respectively.

($1=.6335 Pound)

(Additional reporting by Atul Prakash; Editing by David Hulmes)

Germany United kingdom