European shares ride low-volume rally to 1-week high

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange November 28, 2011.

LONDON (Reuters) - European shares hit a one-week high after a low-volume rally extended into a third day, buoyed by positive U.S. consumer confidence data and hopes policymakers will make progress to contain the euro zone debt crisis at a meeting on Tuesday.

The U.S. data showed consumer confidence bounced back from a 2-1/2 year low in November as apprehension about job and income prospects in the world's largest economy eased.

The FTSEurofirst 300 .FTEU3 index of top European shares provisionally closed up 0.7 percent at 946.99 points, the highest close since November 18. However, the index is still down more than 15 percent in 2011.

The latest auction of Italian debt, held earlier in the session, met strong demand although the country's borrowing costs hit a euro lifetime high.

"The market is benefitting from the Italian auction that saw good bid-to-cover ratios, even if it was at considerably higher levels. Once again hope is up for some comprehensive solution for the problems of the euro zone," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

"But all we have at the moment are rumors and promises. If these do not morph into something more concrete, markets may once again be very disappointed. European leaders have got another chance to get their act together."

(Reporting by Atul Prakash)