The STOXX 600 rose 0.6 percent, led by retailer Ocado's 20 percent advance after a tie-up with France's Casino, though gains by heavyweight energy stocks had the biggest market impact.
Shell rose 3.4 percent after it cancelled an austerity dividend policy and boosted cash-generation forecasts, drawing a line under three years of oil price turmoil.
That helped tp lift the energy sector by 1.6 percent, the biggest sectoral gain.
Spanish and Danish wind turbine makers Siemens Gamesa and Vestas Wind rose 10.2 percent and 8.7 percent respectively, with traders citing India's plan to award 100 gigawatts of solar and wind contracts by March 2020.
A Bank of America note saying the companies offered "very attractive" valuations and earning profiles helped to drive the rally.
The energy sector index, which includes wind power firms but is dominated by oil and gas, has been one of the worst-performing this year as stocks lagged rising crude prices.
However, analysts have been raising their earnings estimates for the sector as investors look ahead to Thursday's OPEC meeting, which will help to determine the path of crude prices.
Investors' eyes were also on political risk in Ireland, where a snap election was averted when the Deputy Prime Minister resigned. Irish stocks were under pressure during the day but were up 0.2 percent by the close.
Among consumer goods stocks, Unilever advanced by 2.3 percent after saying a single corporate structure was in its best interests, though it has yet to make a choice between its British and Dutch bases.
Peers Nestle and Reckitt Benckiser also rose.
Danish jewellery company Pandora jumped 6.3 percent after U.S. hedge fund Maverick Capital lowered its short position on the stock.
Among leading fallers, telecoms and cable group Altice continued its downward spiral with a 3.3 percent decline, bringing its total slide for November to more than 55 percent.
"We still do not see Altice stock as attractive versus European peers," Barclays said, cutting its target price to 9 euros.
UDG Healthcare fell 3 percent after reporting a mixed set of results and the retirement of CFO Alan Ralph.
Leadership change also weighed on CHR Hansen, down 2.9 percent after its CEO resigned.
France's SocGen rose a modest 0.4 percent after it unveiled a three-year plan to cut costs and raise dividends.
(Reporting by Danilo Masoni, Julien Ponthus and Helen Reid,; Editing by Raissa Kasolowsky and David Goodman)
By Julien Ponthus and Helen Reid
Stocks treated in this article : Casino Guichard-Perrachon
, Société Générale
, Unilever (NL)
, Siemens Gamesa Renewable Energy
, Vestas Wind Systems
, Lloyds Banking Group
, Standard Chartered
, Christian Hansen Holding
, Ocado Group PLC
, Reckitt Benckiser
, UDG Healthcare
, Royal Bank of Scotland Group
, HSBC Holdings