Europe close: Stocks advance on hopes for Brexit, vaccines, and US stimulus

European shares hit their highest since level in 10 months on Wednesday on a combination of positive business data, hopes of a Brexit trade deal, the possible early continental roll-out of a Covid-19 vaccine and movement on a US stimulus package.

The pan-European Stoxx 600 index rose 0.82% to 396.08, alongside a gain of 1.52% to 13,565.98 for the German DAX.

US markets had run up overnight driven by renewed hopes of a $908bn stimulus relief bill being passed in Congress by the end of the year.

"European markets have continued in positive territory during the afternoon, but US indices are more mixed, remaining cautious in advance of the Fed meeting, but hoping that a stimulus deal can be cobbled together before Christmas," said IG chief market analyst, Chris Beauchamp.

"Reports suggest a deal in the region of $900 billion will be agreed, and while this is well down on the estimates from earlier in the Autumn, investors will have to be content with this progress, which at least represents a commitment to support ordinary citizens and the US economy."

Investors were also watching for the outcome of the US Federal Reserve’s two-day meeting, scheduled for after the close of trading in London, with markets looking for details on how the vaccine roll-out in the US might have changed the economic outlook.

The pound was little changed against the US dollar at 1.3459, having earlier strengthened to as high as 1.3554 on hopes that a Brexit trade agreement could be reached.

Earlier, European Commission president Ursula von der Leyen said there is "path to an agreement now".

Investors were also cheered by flash PMIs for December which showed French business activity unexpectedly returning almost to growth, while in Germany the index rose to 52.5, topping a forecast for a decline to 50.4.

Hopes of Pfizer-BioNtech's COVID-19 vaccine being available for use before the end of the year rose after the European Union advanced an expert panel to consider its rollout to December 21.

“Any positive vaccine update that suggests that it’s being rolled out sooner is more effective,” said Spreadex's Campbell.

In equity news, shares in French telecom and media company Altice Europe led the gainers after shareholders forced a higher bid from its billionaire founder Patrick Drahi, who agreed to raise his buyout offer.

The new bid of 5.35 euros apiece is a 61% premium to the company’s share price on September 10, the day before Drahi’s initial offer of 4.11 euros a share, and has been accepted by a group of outstanding investors who hold about 9.1% of the total outstanding shares, Drahi’s investment vehicle Next Private said in a statement.

Housebuilders were among the top performers amid Brexit optimism, with Barratt, Redrow, Vistry, Persimmon and Taylor Wimpey all higher.

On the downside, Bunzl lost ground after the distribution and services group forecast revenue growth of 8% in 2020, but lower growth next year as larger Covid-19 related orders slowed down.

Shares in Galapagos plummeted after US-based Gilead Sciences said it was downsizing a a multibillion-dollar deal with the Belgian pharma firm.

Gilead and Galapagos overnight said they will amend their 10-year deal completed in July 2019 which includes a $200m payment to Galapagos to support development and the commercial rollout in Europe of the drug filgotinib in rheumatoid arthritis.

German tire maker Continental rose after the company's forecast for annual earnings before interest and taxes topped market expectations.