(Reuters) - European shares rebounded from the previous session's sharp falls on Wednesday, with brokers pointing to an Italian report on continuing merger talks between Fiat Chrysler Automobiles (MI:FCHA) and Renault SA (PA:RENA) as pushing car industry shares higher.
The pan-European STOXX 600 index (STOXX) rose 0.5% at 0716 GMT, with Italy's FTSE MIB (FTMIB) rebounding from a drop in the previous session amid a deepening Italian political crisis.
Milan shares rose 0.89% and its banking index (FTIT8300) gained 0.96%. Shares in Renault and Fiat both rose around 1.7%.
Italian prime minister Giuseppe Conte resigned on Tuesday, potentially paving the way for a new coalition government.
Capita Plc (L:CPI) rose 4.3% to the top of the STOXX 600 index, after brokerage Goldman Sachs (NYSE:GS) upgraded its shares to "buy".