European shares rose for a third straight session yesterday, led by Royal Dutch/Shell on news it would unify its dual-ownership structure, seen partly to blame for the Anglo-Dutch oil group's reserves scandal.

But mining and steel stocks were a black spot, falling on news that China, a key consumer of commodities, had raised interest rates for the first time in nine years in a bid to cool the economy's near double-digit growth rate.

The FTSE Eurofirst 300 index ended up 0.6 per cent at 1,000.19 points, its first close above the key psychological 1,000 point mark since October 19.

The pan-European index has bounced two per cent from a seven-week low on Monday, when crude oil reached a new peak and the euro surged against the dollar to make euro zone exports more expensive.

The market may be moving in anticipation of a rally after next week's US presidential election, strategists said.

"We have had it already in the last few days," said Michael O'Sullivan of State Street Global Advisers.

Today's data on US third-quarter economic growth will be a test of new-found bullish sentiment, however, because the risk is for a disappointment, Mr O'Sullivan said.