* FTSEurofirst 300 up 0.2 percent, 8th straight session gain
* DAX hits 3-year high, technically 'overbought'
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By Josie Cox and Harro ten Wolde
FRANKFURT, May 2 (Reuters) - European shares rose for a eighth straight session on Monday, with the German blue chip index hitting a 3-year high, fueled by earnings optimism and the death of Osama bin Laden acting as a short-term incentive.
Bin Laden's death in a shootout with U.S. forces in Pakistan on Monday ended a nearly 10-year worldwide hunt for the mastermind of the Sept. 11 attacks and prompted equity investors to believe global risk threats might reduce.
Although the market was lifted by the news, analysts said that the positive impact might be short-lived and focus will soon shift back to economic fundamentals and company earnings.
"It would be naive to expect a nearing end of the al Qaeda threat," Close Brothers Seydler strategist and board member Roger Peeters said.
"However it could lead to some relief in the Western world and in the capital markets ... regarding the existing overall bullish mood in the markets, this news could give another positive impact especially in the U.S. stock markets," he added.
At 1130 GMT, the FTSEurofirst 300 index of top European shares was up 0.2 percent at 1,159.39 points after touching 1,162.05, the highest since early March. The Euro STOXX 50 -- an index of the euro zone's top blue chips -- was up 0.2 percent at 2,666.46 points.
The UK stock market was closed for a holiday.
Across Europe, France's CAC 40 gained 0.2 percent, while Germany's DAX rose 0.7 percent to its highest level in more than three years, with traders and analysts pointing to high hopes of strong earnings.
The DAX's relative strength index (RSI) hit 71.5 on Monday -- with 70 and above considered "overbought" -- while the chart's slow stochastic and moving average convergence divergence (MACD), short-term trend indicators, showed the index is poised for a retreat.
Commerzbank shares lead the DAX with a 3.2 percent gain on forecast-beating first quarter earnings.
Demag Cranes soared as much as 23 percent to top the midcap index after U.S. peer Terex launched a hostile takeover bid.
After last week's low volumes due in part to public holidays across Europe, trading should pick up later in the week, with U.S. jobless claims figures on Thursday and nonfarm payroll numbers on Friday, senior trader Markus Huber at ETX Capital said. In the shorter term, investors awaited the release of the U.S. Institute for Supply Management's manufacturing index at 1400 GMT on Monday.
"Traditionally May is not a good month for equities, but with added liquidity in the markets at the moment, this trend should not set in until later," Huber said, adding that regional elections in Spain were also worth watching later on this month.
Elsewhere in Europe Swiss company Actelion was one of the biggest losers, falling 6.2 percent after the company said it may appeal against a jury's decision in a Californian court to award Asahi Kasei Pharma Corporation up to $547 million in a dispute with one of its units. (Additional reporting by Blaise Robinson in Paris. Editing by Hans Peters)