Miners pulled European shares back up towards three-year highs yesterday thanks to copper futures hitting an all-time high.
Australian shares touching record highs also helped diversified miners with BHP Billiton gaining 4.2 per cent, Rio Tinto 3.9 per cent and Anglo American 2.6 per cent.
The DJ Stoxx basic resources index surged 3.1 per cent to be Europe's lead sector as the copper price combined with Dutch bank ABN AMRO citing good prospects for miners due to booming demand for bulk commodities from Asia.
ABN also raised its rating on BHP to "buy" from "add", with a price target of 845 pence.
"Six or seven months ago people were writing off commodity stocks saying Chinese growth was slowing but it was nonsense and was just an unwinding," Daniel Birch, strategist at Execution said.
"Commodities have come out the other side and apart from Europe there is still demand in China, other parts of Asia and the US. It is still a good play, I would still be buying them."
The FTSEurofirst 300 index closed 0.5 per cent higher at 1,137.97 points. The index hit an intraday three-year high of 1,139.67 on Wednesday.
The narrower DJ Stoxx 50 index firmed 0.4 per cent to 3,160 with both indexes benefiting from the Dow Jones Industrial average in New York ticking higher before dipping after Europe's close.
Steelmakers Arcelor, Corus and ThyssenKrupp climbed after they all announced further output cuts in the face of sagging Western demand to protect margins while the spike in commodity shares also helped.
"Steel is a different kettle of fish to commodity stocks as the market expects next year's figures to be weaker. The play is to go long on miners and short on steels," Mr Birch added.
Sanofi-Aventis was the day's biggest loser, dropping 5.4 per cent after a US court effectively invalidated the patent on the firm's Lovenox blood thinner.
Tobacco stocks also weighed, with BAT losing 2.2 per cent and Imperial slipping 1.6 per cent as CSFB cut its tobacco sector rating to "neutral" from "overweight".
Oil firms were also strong with crude prices going close to $56 a barrel after data on Wednesday showed a draw in US oil stockpiles and Opec said its deal to raise quota limits by 500,000 barrels a day was unlikely to cut prices.
Royal Dutch/Shell added 1.5 per cent.
Anglo-American listed Carnival sailed five per cent higher in London after quarterly earnings rose 23 per cent as strong demand drove ticket prices higher at the world's largest cruise group.
Shares in UniCredito added 1.4 per cent and German takeover partner HVB put on 1.8 per cent as investors warmed to the prospect of large benefits from the landmark deal.
HVB-owned Bank Austria rose 1.4 per cent.