Stronger economic growth and rising corporate confidence boosted European stocks to fresh 19-month highs yesterday, with miner BHP Billiton a top gainer after it won bumper new orders from China.

The world's largest mining company, BHP Billiton said it signed a $9 billion deal to supply iron ore to resource-hungry China, which sent its shares up 4.1 per cent.

That helped push the DJ Stoxx basic industries sector index up 2.5 per cent to its highest level since June 2002.

Dealer talk that France's Total was casting an eye over British gas and oil firm BG prompted investors to make a beeline for energy stocks, which rose 2.1 per cent.

BG ended up four per cent to an all-time high and Total, which declined to comment, climbed 1.6 per cent.

Chemicals were also busy after Europe's biggest chemicals maker, BASF said late on Friday the worst was over. Its shares rose 2.5 per cent, despite the company expressing doubts about its ability to meet earnings goals.

The FTSE Eurotop 300 index of pan-European blue-chip shares ended up one per cent at 1,018.02, the highest close since July 10, 2002. In heavy volume, gainers outnumbered losers by three to one.

The narrower DJ Euro Stoxx 50 index was up 0.88 per cent at 2,918.56.

Strategists said European stock markets were consolidating recent gains, but they think the uptrend is intact and that Europe still offers value.

"The upswing has further to run," said Klaus Wiener, chief strategist at AMB Generalit Finanz. "Stronger global economic growth, rising company profits and ample liquidity is positive for equities."