Car industry shares rally after reports of China vehicle tax cut

Financial stocks also boosted by HSBC results as FTSE 100 enjoys best day for weeks

Shares in carmakers were boosted on Monday by a report that China is considering cutting vehicle sales tax to boost demand, helping European stock markets rebound after last week's mauling.

Financial stocks also contributed to the rally, thanks to strong results from Europe's biggest bank, HSBC, as well as the decision by Standard & Poor's not to downgrade the Italian government's credit rating.