European shares notched up their biggest one-day gain in a month on Monday, led by banks and insurers on hopes euro zone leaders will unveil fresh measures to help resolve the region's debt crisis, ahead of a summit next week.

Germany and France stepped up a drive on Monday for powers to reject euro zone members' budgets that breach EU rules. Finance ministers of the 17-nation currency area meeting on Tuesday are due to approve detailed arrangements for scaling up the European Financial Stability Facility rescue fund to help prevent contagion in bond markets.

However, some strategists pointed to low trading volume and said recent weakness in the market, tempting buyers, was a major factor behind the surge in shares.

Any kind of good news was always going to be taken as positive. There has been some bargain hunting going on. The market got oversold in the last few weeks and some of the most cyclical areas of the market seemed to be pricing in the worst fears, said Erik Esselink, fund manager at Invesco Perpetual, which has 5 billion euros under management.

The FTSEurofirst 300 <.FTEU3> index of top European shares rose 3.5 percent to a provisional close of 939.91 points, the biggest one-day gain since October 27. However, the index is still down 5.6 percent in November.

The heavyweight banking sector contributed most to the index's gain. BNP Paribas rose 10.3 percent. The STOXX Europe 600 Banking Index <.SX7P> rose 5.6 percent, though it is still down 36.5 percent in 2011, with several banks having had to write down the value of government bonds in the euro zone periphery.

(Reporting by Brian Gorman)