The European equities markets were higher on Wednesday, aided by gains in the banking and oil sectors. The FTSE Eurofirst 300 added 1 percent to 1,528, its highest closing level in six years.

In the oil sector, Statoil gained 1.6 percent to NKr163.50 on comments from UBS that outlined the upside of an announced merger with Norsk Hydro. The broker upgraded its recommendation on Statoil from “neutral” to “buy” and hiked its target share price from NKr166 to NKr185.

Banks saw gains in several nations. In Spain, JP Morgan issued upgrades for both BBVA and Santander. BBVA added 1.4 percent to €19.35 after its recommendation was raised from “neutral” to “overweight”, while Santander was 2.3 percent higher to €143.49 on an identical hike in its rating.

In Italy, Morgan Stanley upgraded both Banca Monte dei Paschi di Siena and Capitalia from “underweight” to “equal weight”. Siena was up 0.7 percent to €4.9525 and Capitalia gained 2.3 percent to €7.02. Meanwhile, the broker added Banco Popolare di Verona e Novara to its model portfolio, sending the bank’s shares up 3.1 percent to €24.10.

Meanwhile, UniCredit’s announcement that it will buy out minority shareholders in German bank HVB Group and Bank Austria Creditanstalt send shares in both banks significantly higher. HVB gained 4.2 percent to €36.00, while Bank Austria was 4.7 percent higher to €131.50. UniCredit, which already owns 95 percent of both banks, was up 1.6 percent to €7.2050.

Among losers on the day was SAP. The software maker dropped 6.5 percent to €35.89 when it said that margins would be lower this year and failed to issue an outlook on license sales.

Weakness in the automobile manufacturing sector hurt European stock markets on Tuesday, but strength in other sectors allowed the FTSE Eurofirst 300 to close 0.2 percent higher at 1,321.46.

The steel sector saw advances as ThyssenKrupp did the best among blue-chip stocks with a gain of 3.8 percent to €28.64 after it said it will buy back as much as 5 percent of its shares. West LB saw this as a sign that further consolidation in the sector will follow the Arcelor-Mittal merger.

Banks also did well amid mergers and acquisitions rumors. BBVA of Spain added 1.9 percent to €16.55 on talk that it could merge with HSBC. It was also helped by hopes that the results of the presidential election in Mexico, where it generates a substantial part of its earnings, could be beneficial to business. Elsewhere in the Spanish banking sector, Deutsche Bank issued positive comments about Banco Santander Central Hispano and Banco Pastor, sending their share values up 0.4 percent to €11.49 and 2.9 percent to €10.60 respectively.

Among carmakers, Volkswagen dropped 0.1 percent to €55.14 and Peugeot declined by 0.9 percent to €48.85. DaimlerChrysler fell 0.7 percent to €38.50 after new data showed that while its Mercedes Benz sales were up by 14 percent last month, sales by its US Chrysler unit were down 15 percent in the month. In addition, Morgan Stanley cut DaimlerChrysler’s target share price from €50 to €46.

Elsewhere in the sector, Fiat was down 1.8 percent to €10.349 on a downgrade from “neutral” to “sell” from Merrill Lynch. Renault was also 1.8 percent lower, to €82.70, after it said that it will explore the idea of an alliance with General Motors if GM proposes such a move.

In Europe on Tuesday the FTSE Eurofirst 300 hit another four and a half year high to close 0.1 percent higher to 1,373.56.

The gain came even though shares in the oil sector were down as crude oil prices dropped early in the day. Total and Eni dropped 1 percent each, to €210.90 and €23.21 respectively. Statoil declined by 2 percent to NKr171.50.

Stock exchange operators were down as well as bid rumors began to subside. German exchange Deutsche Borse was down 2.4 percent on the day to €114.43, while Euronext dropped by 1.3 percent to €61.55.

The banking sector was mixed on the day. ABN Amro was up on reports that BBVA was thinking of bidding for the Dutch bank, gaining 2.7 percent to €25.68 after going as high as €25.78 earlier in the day. BBVA, however, dropped 0.8 percent to €17.

Banco Santander Central Hispano declined by 0.1 percent to €12.07 on talk that it might be looking for more foreign purchases after recently buying a UK mortgage lender. Smaller Spanish banks were up, however, with Banco Popular gaining 4.3 percent to €12.52 and Bankinter adding 0.5 percent to €57.10.

Icelandic banks were down on the day after Danske Bank issued a prediction that the economy there is poised to enter a recession. Kaupthing dropped 3.9 percent to IKr878, while Landsbanki declined by 4.3 percent to IKr26.50 and Glitnir fell 4.2 percent to IKr18.20.