(Reuters) – Euro zone stocks surged on Wednesday after a report the European Commission wants to mobilise a bigger-than-expected 750 billion euros for the post-coronavirus economic recovery.

The euro zone stock index .STOXXE touched a session high, with 1.3% jump, while the pan-European STOXX 600 rose 0.7%.

Banking-heavy bourses of Spain .IBEX and Italy .FTMIB rallied 2.4% and 1.4% respectively after a senior EU official said the commission would propose that Italy and Spain get the lion’s share of the new recovery fund offering a mix of grants and loans.

The proposal is due to be announced around 1130 GMT in the European Parliament.

Euro zone banks .SX7E charged 5.5% higher, with Spain’s Banco de Sabadell (SABE.MC), French lenders BNP Paribas SA (BNPP.PA) and Societe Generale SA (SOGN.PA) jumping about 9%.

Italian banking index .FTIT8300 gained 3.6%.

“The size of the market reaction is relatively modest if you compare it to the plan itself, but that is because there were quite some expectations in the market,” said Elwin de Groot, head of macro strategy at Rabobank.

“We really have to see this is a reaction to the size of the programme being bigger and the European Commission not being deterred from the opposition that is visible in some member states.”

Hopes for a co-ordinated fiscal response to the coronavirus crisis have been boosted since France and Germany made proposals for the 500-billion-euro recovery fund.

Aside from banks, other hard-hit sectors including travel and leisure .SXTP and automakers .SXAP rallied.

The easing of lockdowns in many European countries and improving economic data have spurred buying in the growth-exposed cyclical sectors in recent weeks, putting European stocks on course for a modest 3.3% gain in May.

“European investors are really focusing on the reopening and that’s gathering some momentum,” said Ian Williams, strategist at Peel Hunt.

“With the cyclicals, the most extreme risks seem to have been priced in and people are looking for some cheaper opportunities.”

The latest updates helped investors look past fresh protests in Hong Kong over new national security laws proposed by Beijing and U.S. President Donald Trump’s warning of a strong response to China’s move by this week.

Automakers were boosted by an 16.5% surge in French carmaker Renault (RENA.PA) after it and Nissan Motor Co (7201.T) announced steps in a wide-ranging revamp of their partnership to slash costs and survive. [nL8N2D91K4]

Chipmaker Infineon Technologies AG (IFXGn.DE) dipped 5.5% after it raised about 1.06 billion euros ($1.16 billion) by issuing new shares.

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