Europe open: Auto makers and travel names pace early gains

Investors were pushing shares of auto manufacturers to the fore on Wednesday amid optimism regarding governments' plans to reopen economies and ease restrictions on travel across the Continent.

There was also great expectation ahead of an expected unveiling in Brussels of the European Union's reconstruction fund for the bloc.

"Markets appear to be betting that consumers may well go off on a summer spending splurge, as pent up demand gets unlocked, as we head into the summer months," Michael Hewson, chief market analyst at CMC Markets UK.

Against that backdrop, as of 1000 GMT the benchmark Stoxx 600 was ahead by 0.67% to 351.25, alongside a 1.2% rise for the German Dax to 11,644.42 while the FTSE had managed to reverse an early dip and was up by 0.77% at 18,000.41.

Pacing gains on the Stoxx 600 were shares of auto and parts makers with a 5.97% jump in a sub-index tracking the group, while Travel&Leisure names were posting big gains for a third day running, adding 2.97%.

Finland's Nokian Tyres was the top gainer on the Stoxx 600 after the company named Jukka Moisio as its new chief executive officer.

French carmaker Renault wasn't far behind, with its shares racing higher after announcing details of its new strategic plan alongside partners Nissan Motor and Mitsubishi.

Hennes&Mauritz was also in the headlines after the Nordic fashion retailer said the 2,500 staff furloughed at its Stockholm HQ would return to work in July.

In the technology space meanwhile, German chipmaker Infineon was higher after successfully raising €1.06bn in fresh equity to help finance the purchase of US-based Cypress Semiconductor.

Commenting on Brussels's expected announcement, Erik Nielsen at Unicredit said on 24 May: "my view is that the Rubicon has been crossed, and most importantly by Germany.

"Merkel changed tact, most likely because she realizes that this is a much more profound crisis than previous ones, and it is taking place in an increasingly dangerous world shaped by the collapse of US leadership and the increasingly assertive China, with Russia playing spoiler in Europe and elsewhere."

Linked to the above, there was also talk of the need to promote European industrial champions.

Elsewhere, European Central Bank governing council member, Isabel Schnabel, reportedly said the recent controversial ruling by the German Constitutional tribunal, in Karlsruhe, "does not directly affect" the ECB's bond buying programme.

Further west, survey readings from INSEE revealed that French manufacturing sector confidence lagged the rebound expected by analysts in May by a wide margin.

The statistics agency's index rose from a revised reading of 68 for April to 70 in April but that was far below the recovery to 85 anticipated by economists.

Claus Vistesen at Pantheon Macroeconomics termed the figures "dreadful" despite problems around data-collection, methodology changes and the timing of the survey, which was conducted in the first half of the reference month, when the country was still under lockdown.