European shares rose on Monday as commodities surged on a near $600-billion Chinese economic stimulus plan, though stocks ended well off day highs on doubts that the plan was enough to avert a sharp global slowdown.
The FTSEurofirst 300 index of top European shares unofficially closed up 0.9 percent at 923 points, way off a day's high of 945.55 points.
This was the eighth day of gains in the last 10 for the pan-European benchmark.
China approved a $586 billion government spending package and announced a shift to "moderately easy" monetary policy despite having already made three interest rate cuts since mid-September.
However, Peter Dixon, strategist at Commerzbank said that the rebound was because of oversold markets over the past few weeks.
"While the China stimulus could be perceived as positive for the market, it is really a double edged sword," he said.
"If it works then it could mean China economy could grow fairly rapidly. But, what it also means is that the economy has been weaker than anticipated prior to this event," he said.
"The question has to be raised if this stimulus package is really going to help drive the export-led industry which Europe needs to drive corporate activity. The jury is out. The initial optimism may be overdone," he said.
Commodities were the biggest movers on the index.
Miners were higher after copper rose 8.3 percent on China's spending plan.
Anglo American, BHP Billiton, Rio Tinto and Xstrata were 8.6-11.6 percent higher.
Oil rose more than 5 percent, fuelled by hopes that plans around the world to lift growth could avert recession and by Saudi Arabia's intention to cut crude supplies to Asia in December.
BG Group, BP, Total and ENI were up 0.9-3 percent.
Banks were the biggest losers on the index. Spain's Banco Santander fell 5 percent after the group launched a shock $9.2 billion rights issue to shore up its capital and said it had postponed its planned asset sales due to poor market conditions.
Across Europe, the FTSE 100 index was up 0.9 percent, Germany's DAX was 1.8 percent higher and France's CAC 40 was up 1.1 percent.
