Peugeot rose 9.9 percent and Faurecia added 9.4 percent by 0857 GMT, fueled in part by short-covering, after Paris-based brokerage CM-CIC said the carmaker may be forced to dispose of its Faurecia stake to raise between 1.2 billion euros ($1.6 billion) and 1.5 billion.

Peugeot had no immediate comment, a spokesman said. A Faurecia spokesman did not immediately return calls seeking comment.

Peugeot is among the most shorted stocks in Europe, with 18 percent of the company's shares out on loan, according to Markit, a provider of trading data.

Hedge funds with negative bets on the stock are feeling the heat from the stock's 50 percent jump over the past month, prompting some of them buy back shares to cover their positions.