UPDATE 2-European shares gain as recovery hopes boost cyclicals

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* Travel, bank oil& gas stocks lead gains
* Italy's Mediobanca jumps on Vecchio's move to up stake
* Spain's MasMovil surges on $3.3 bln private equity bid
* German, Swiss markets closed for Whit Monday

(Updates to market close)
By Sruthi Shankar
June 1 (Reuters) - European shares rose on Monday, as signs
of recovery for the continent's manufacturers prompted investors
to continue snapping up cyclical stocks.
The pan-European STOXX 600 index .STOXX finished up 1.1%,
holding at highest level since March 9 even as trading activity
was dulled by market holidays for Germany, Switzerland, Denmark
and Norway.
Growth-sensitive sectors beaten up by the coronavirus crisis
led the gains, with travel & leisure .SXTP jumping 3%, while
banks .SX7P , miners .SXMP and oil & gas .SXEP companies
rose between 2% and 2.6%.
While factory activity still contracted sharply across
Europe in May, purchasing managers said April lows had passed as
governments began to ease the tough coronavirus-led lockdown
measures. After crashing to its lowest reading in the survey's nearly
22-year history in April, IHS Markit's Manufacturing Purchasing
Managers' Index (PMI) for the euro zone rose to 39.4 from 33.4.
"The current beta rotation is helping the overall market
through increased breadth," analysts at J.P.Morgan Cazenove
note.
But they cautioned the current move up in PMI will not end
up building on itself "as the rebound is largely technical in
nature."
Investors also took relief as U.S. President Donald Trump
left the Phase One trade deal intact even as he began the
process of ending special treatment for Hong Kong in response to
China's plans to impose new security legislation in the
territory. China has told state-owned firms to halt purchases of
soybeans and pork from the United States, sources told Reuters.
Global markets kicked off June on a positive note, with the
STOXX 600 recovering nearly 32% since March lows as hopes of a
COVID-19 vaccine, easing lockdowns and expectations of more
stimulus from the European Central Bank, set to meet on
Thursday, helped improve risk appetite.
MasMovil MAS.MC surged 23.8% as buyout funds KKR KKR.N ,
Cinven and Providence said they had made a 2.96 billion euro
($3.3 billion) board-backed bid for the Spanish telecoms
operator. Italy's Mediobanca MDBI.MI jumped 8.1% after billionaire
Leonardo Del Vecchio confirmed he had asked for green light from
the European Central Bank to increase his stake in the company.
Primark-owner Associated British Foods ABF.L gained 8% as
it announced it was working to re-open all the fashion
retailer's 153 stores in England on June 15. UK fashion brand Ted Baker TED.L reversed course to trade
4.1% higher as it rolled out plans to raise 95 million pounds
($117.84 million) through a stock issue to help it ride out the
COVID-19 crisis.