UPDATE 3-Euro zone shares supported by recovery plan, banks jump

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* STOXX 600 on course to end May with modest gains
* Euro zone banks jump after EU recovery fund plan report
* Renault soars after plans to deepen cooperation with
Nissan

(Updates to market close)
By Sruthi Shankar
May 27 (Reuters) - Euro zone stocks were buoyed on Wednesday
by a 750-billion-euro ($824 billion) plan to prop up EU
economies hammered by the coronavirus crisis, but falls for
healthcare and technology stocks weighed on broader European
markets.
The euro zone equities index .STOXXE finished 1.1% higher
after jumping as much as 1.6%, while the pan-European STOXX 600
.STOXX closed up 0.2%.
Under the proposal, the European Commission would borrow the
funds from the market and then disburse two-thirds in grants and
the rest in loans, with much of the money going to Italy and
Spain, the worst affected by the pandemic. Spain's banking-heavy IBEX .IBEX jumped 2.4%, with Banco
Santander SA SAN.MC and BBVA BBVA.MC rising 4.9% and 3.4%
respectively.
Euro zone banks .SX7E climbed 4.8%, with French lenders
BNP Paribas SA BNPP.PA and Societe Generale SA SOGN.PA
leading gains. Italy's banking index .FTIT8300 rose 2.6%.
"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."
A Franco-German proposal for 500 billion euros in grants
last week faced some resistance from more frugal northern
nations, which wanted only loans.
Aside from banks, other hard-hit sectors including travel
and leisure .SXTP and automakers .SXAP rallied.
Renault RENA.PA jumped 17.5% after the French carmaker and
Nissan Motor Co 7201.T doubled down on a plan to cooperate on
production to save costs and salvage their troubled
alliance. Easing of lockdowns in several European countries and
improving economic data have spurred buying in growth-exposed
cyclical sectors in recent weeks, putting European stocks on
course for a 2.8% 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."
But the healthcare .SXDP and technology sectors .SX8P ,
which have been resilient during the coronavirus crisis, dropped
2.5% and 1.4% respectively.
Also keeping investors on edge are 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. ($1 = 0.9107 euros)