* FTSEurofirst 300 index rises 0.3 percent
* Banks gain as Citigroup results top expectations
* Novo Nordisk hit by Pfizer insulin deal
By Harpreet Bhal
LONDON, Oct 18 (Reuters) - European shares rose to their highest closing level in nearly six months on Monday, with banks boosted by upbeat results from U.S. lender Citigroup, while oil majors drew support from a rally in crude prices.
The pan-European FTSEurofirst 300 index of top shares closed 0.3 percent higher at 1,088.40 points, its highest closing level since April 26.
Banks were among the biggest gainers, buoyed by better-than-forecast quarterly profit at Citigroup. European banks Barclays, HSBC and Societe Generale were up 1.1 to 2 percent.
"The (Citi) results have been a cause for cementing gains as opposed to convincing people to take money off the table. Indices are still firmly dictated by QE 2, the strength of the dollar and strength of commodity prices," said Joshua Raymond, market strategist at City Index.
Heavyweight oil majors were also on the rise as crude prices rose above $82 after the dollar pared earlier gains and as week-old strikes at French refineries lifted refined product futures. BP, BG Group and Total added 0.9 to 2.3 percent.
Falls in mining stocks, however, limited further gains as investors sold heavyweight miners following recent strength. The STOXX Europe 600 basic resources index shed 1.1 percent.
Within the sector, BHP Billiton and Rio Tinto lost 0.6 percent and 1.5 percent respectively after the companies ditched plans to form the world's biggest iron-ore joint venture.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 were up 0.2 to 0.7 percent.
NOVO NORDISK PRESSURED
Among individual movers, insulin producer Novo Nordisk fell 5.1 percent after U.S. peer Pfizer agreed a deal to sell Indian group Biocon's biosimilar versions of diabetes treatment insulin.
Philips Electronics shed 4.2 percent after the world's largest lighting group reported weaker-than-expected revenue growth in the third quarter and gave a cautious fourth-quarter outlook.
Luxury goods makers were also weak, with Hermes and PPR down 1.9 and 2.8 percent respectively.
Analysts said the sector was being pressured by a report by U.S. consultancy Bain & Co which predicted the luxury sector's growth would slow to 3-5 percent next year after a 10 percent rebound in 2010.
On the upside, British chip designer ARM Holdings rose 2.9 percent on the back of anticipation of strong earnings from U.S. technology firms Apple and IBM Corp, which report earnings after U.S. markets close on Monday.
On the economic front, data showed U.S. industrial production contracted in September for the first time in more than a year, strengthening the view that the U.S. Federal Reserve will pump more money into the economy.
"Investors are sensitive to economic data considering most people are pricing in extra stimulus from the Fed at the start of November," Raymond said.
Although further quantitative easing by the Fed has largely been priced in to the equity market, investors are unsure of just how much the U.S. central bank will inject through purchases of government securities. (Editing by David Cowell)