Carmakers and banks led a recovery on European indices on Wednesday, as equity markets bounded back from a month-low on Tuesday.

Renault led the car sector higher, gaining 4 per cent to €31.37 on the back of strong earnings from Nissan, the Japanese company in which Renault owns a 44 per cent stake. Nissan reported better-than- expected earnings and raised its 2009 operating profit forecast from Y100bn ($1bn) to Y120bn.