Carmakers and other cyclical stocks led European equities higher as bullishness on global recovery trumped ongoing concerns about the triumvirate of crises hitting Japan, Libya and the eurozone.

The motor sector was the day’s strongest, even amid warning that the crisis in Japan would disrupt production, both of car parts and potentially also of downstream components such as chemicals.

“The sector has managed to shrug it off, despite what seems to be a worsening situation in the shorter term,” said one sector analyst.

BMW and Daimlerled the German market as BMW rose 4.2 per cent to €57.60 and Daimler rose 3.5 per cent to €49.02.

The FTSE Eurofirst 300 auto & parts sub-sector gained 3.3 per cent while the overall FTSE Eurofirst 300 index rose 1.1 per cent to 1,123.52.

New data from the US indicated that car sales in March would grow despite rising petrol prices.

The analyst, however, said that the sector, which had been sold off heavily so far this year, was carried aloft by the day’s broadly bullish tone.

The Lisbon bourse also held up throughout the day as equity investors reacted in a relatively sanguine manner to the resignation of the country’s prime minister and a spike in government bond yields to the highest levels seen since the debut of the euro.

The main index was up 1.1 per cent to 7,868.07, recovering ground that it had lost on Wednesday when investors first reacted to news of a potential political shake-up.

Brisa, a motorway operator, led the market with gains of 2.4 per cent to €4.85. Banif, a bank, gained 2 per cent to €0.86.

Nuno Serafim, an analyst with IG Markets in Lisbon, said investors had already priced into the market the likelihood of a change in government as the outgoing premier did not have a majority in parliament.

“It’s likely that if, in fact, . . . Portgual will ask for assistance, we’ll see some initial sell-out,” said Mr Serafim. But he expected that such a sell-off would probably trigger buying from investors looking for cheaply priced stocks.

Elsewhere, Mediaset, Silvio Berlusconi’s media group, fell 2.1 per cent to €4.48 in Italy after a series of broker downgrades on concerns about its disappointing 2011 outlook.

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