* FTSEurofirst 300 up 1 percent to seven-week closing high
* China's currency move boosts appetite for risky assets
* Commodity, banking shares among top gainers; BP slips By Atul Prakash
LONDON, June 21 (Reuters) - European shares rose for a ninth straight session on Monday to a seven-week closing high as China's move to allow a flexible yuan raised hopes for a recovery in the global economy and boosted demand outlook for commodities.
Mining and energy shares were among the top gainers, taking strength from firmer metal and oil prices which climbed on expectations a stronger Chinese currency would lift purchasing power for foreign goods in the world's third-biggest economy.
The FTSEurofirst 300 <
> index of top European shares ended 1 percent firmer at 1,055.38 points, the highest close since early May. It is up more than 7 percent in nine sessions, but is up just 0.8 percent for the year as worries about debt levels in the euro zone hurt sentiment in April and May.The yuan surged on Monday by the most of any day since its landmark revaluation in 2005 after the country's central bank announced over the weekend that it would allow more flexibility for the currency. [
]"This can be viewed as a vote of confidence by the Chinese officials in the strength and the resilience of the Chinese economy and that is being taken as positive," said Klaus Wiener, head of research at Generali Investments.
"We had a nine-day spell of good performance. We may see a setback at some point, but on balance, we will see a slightly positive drift in equity markets for 2010."
Equities across the world rose on expectations that China's move would ease political tensions with the West and encourage investors to snap up riskier assets. A higher yuan would also help temper inflation in the country, which could mean Beijing would have less need to tighten monetary policy aggressively.
"It is a powerful story for equity markets," said Mike Lenhoff, chief strategist at Brewin Dolphin.
"China's readiness for further exchange rate reform is just what is needed. Together with interest rates on hold at the major central banks, it provides another means of reflation for the global economy."
Among miners, BHP Billiton <BLT.L>, Rio Tinto <RIO.L> and Vedanta <VED.L> gained 4.7 to 6 percent, while oil companies Royal Dutch Shell <RDSa.L>, Repsol <REP.MC> and Tullow Oil <TLW.L> added 1.4 to 2.3 percent.
"It's totally on the back of China, and miners are the best performers, which shows you where the drive in the markets is coming from. We're also seeing generic higher appetite for risk," said Joshua Raymond, market strategist at City Index.
But BP <BP.L> fell 2.2 percent. An internal BP document released by a U.S. lawmaker estimated a worst-case scenario rate for the Gulf of Mexico oil spill could be about 100,000 barrels per day, far higher than the current U.S. figure.
OIL SERVICES GAIN
Shares in European oil services firms got a boost from news that Oslo-listed oilfield services provider Acergy <ACY.OL> has agreed to buy rival Subsea 7 <SUB.OL> in an all-share deal set to create a leader in undersea engineering.
Subsea and Acergy rose 9.1 and 9.6 percent respectively, while France's Technip <TECF.PA> gained 5.5 percent.
Investors' appetite for risky assets also helped banks, with the STOXX Europe 600 banking index <.SX7P> rising 0.8 percent. Standard Chartered <STAN.L>, HSBC <HSBA.L>, Barclays <BARC.L> and Societe Generale <SOGN.PA> rose 1.5 to 1.7 percent.
Among individual shares, Swatch Group <UHR.VX> and Richemont <CFR.VX> gained 5.4 percent and 4.1 percent respectively as investors expected the watchmakers to benefit from stronger sales in China after the currency move.
Across Europe, the FTSE 100 <
>, Germany's DAX < > and France's CAC 40 < > gained between 0.9 and 1.3 percent. The Thomson Reuters Peripheral Eurozone Countries Index <.TRXFLDPIPU> rose 0.7 percent. (Additional reporting by Brian Gorman; Editing by David Cowell)