FRANKFURT: European stocks closed at over a five-week high on Wednesday, with travel stocks surfing a wave of optimism following reports of progress in developing a Covid-19 vaccine.

Hard-hit airline stocks like British Airways-owner IAG, Ryanair and Lufthansa rose between 9.7% and 10.7%, while cruise operator Carnival Plc jumped 11.4%.

The travel & leisure index surged 6.1% to lead sectoral gains, but still remains the worst performer in Europe this year with a 33% plunge as the coronavirus pandemic brought global travel to a halt.

The pan-European STOXX 600 rose 1.8%, closing just short of levels last seen in early March, while euro zone blue-chips jumped 1.7% to hit their highest level since March 5.

Investors were encouraged by an early-stage study on US biotech firm Moderna Inc's experimental vaccine for Covid-19 that provoked immune responses.

Meanwhile, AstraZeneca jumped 5.2% after a report said positive news on the University of Oxford's potential Covid-19 vaccine that has been licensed to the drugmaker could be announced as soon as Thursday.

Among individual movers, Swedish telecom operator Tele2 AB gained 2.9% as it reaffirmed its 2020 earnings outlook and plans for an extra shareholder payout.

The world's largest fish farmer Mowi ASA jumped 6.8% as harvest volumes beat its own forecast. Shares in peer Salmar rose 2.2%.

The top gainer on the STOXX 600 was Atlantia SpA, which shot up 26.7% after the Italian infrastructure group and its unit Autostrade made the government new offers to settle their long-running dispute.

Semiconductor equipment maker ASML Holding NV declined 3.7% as it reported quarterly profit below estimates, but forecast overall growth for 2020. Swedish bank SEB AB fell 1.6% after reporting a smaller-than-expected fall in net quarterly profit, but credit loss provisions surged. Handelsbanken AB also dropped 2.6%.