* FTSEurofirst 300 up 0.9 pct to near one-week closing high
* Oil majors among top gainers; BP rises
* FOMC meeting minutes eyed for Fed's outlook on recovery
By Harpreet Bhal
LONDON, Jan 4 (Reuters) - European shares hit their highest closing level in nearly a week on Tuesday, with oil majors contributing to the bulk of gains as commodity prices were boosted by strong manufacturing data from around the world.
The pan-European FTSEurofirst 300 index closed 0.9 percent higher at 1,142.01 points, with Britain's FTSE 100, which has a large proportion of commodity shares, rising 1.9 percent on its first trading day of the year.
Commodity stocks were buoyed by upbeat demand expectations following reassuring manufacturing data from China, the United States and Europe, with the STOXX Europe 600 oil and gas index up 2.5 percent as crude prices hovered near a 27-month high before later paring gains.
"It has been a great start to the year kicked off by commodity stocks but I think the markets could start to slow a bit. European debt problems are going to be the major story that will put us in a risk-off trade," said James Hughes, market analyst at CMC Markets.
BP climbed almost 6 percent and earlier hit a six-month high after the Daily Mail newspaper reported rival Royal Dutch Shell considered a takeover bid, and as investors were reassured by comments that suggested damages from its oil spill could be half the expected level.
Within the sector, BG Group added 2.7 percent while Total was up 1.3 percent.
PATH TO RECOVERY
Adding to the upbeat view on the pace of economic recovery following the strong manufacturing figures in the previous session, data showed new orders received by U.S. factories unexpectedly rose in November, and orders excluding transportation recorded their largest gain in eight months.
Analysts said recent gains in equities reflected improving sentiment towards the prospects for the global economy.
"The U.S. is now going to take the lead in the global economy, helped by a very loose policy," said Mike Lenhoff, chief strategist at Brewin Dolphin.
"Confidence has been boosted considerably because of the support that the policy has been providing. If they are successful in doing that, that is a good news for the global economy and for corporate earnings."
Investors will scour the minutes of the Federal Open Market Committee's meeting from Dec. 14, for an insight into the U.S. central bank's outlook on the economy. The minutes are due at 1900 GMT, after European markets close.
Appetite for risky assets rose, with the VDAX-NEW volatility index falling 3 percent. The lower the index, the higher the market's desire to take risk.
Banks, seen as a barometer for risk, were among the gaining sectors. Barclays, Societe Generale and Deutsche Bank rose 2.4 to 4.2 percent.
On the downside, Piraeus Bank, Greece's fourth-largest lender, fell 11.8 percent after saying it will issue new shares to raise 807 million euros ($1.06 billion) to boost its balance sheet and cope with the Greek debt crisis.
Other fallers included watchmaker Swatch Group, which shed 3.1 percent as concerns about the impact of the strong Swiss franc weighed on the stock. (Additional reporting by Atul Prakash; Editing by David Cowell)