BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks closed on buoyant note on Tuesday on hopes about a post-Brexit trade deal, encouraging UK GDP and German consumer confidence data, and news about U.S. Senate's nod to a coronavirus aid package.
Worries about a highly infectious new coronavirus strain in the U.K., and travel restrictions imposed by several European countries weighed on sentiment and limited markets' gains.
The pan European Stoxx 600 climbed 1.18%. The U.K.'s FTSE 100 climbed 0.57%, Germany's DAX moved up 1.3% and France's CAC 40 gained 1.36%, while Switzerland's SMI advanced 0.95%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkey all closed higher, posting sharp to moderate gains.
In the UK market, IAG shares rallied nearly 6%. Natwest Group, Barclays, Lloyds Banking Group, Avast and JD Sports Fashion gained 3 to 3.6%.
Smith & Nephew, Legal & General, Schrodders, Ashtead Group, ICP, Rolls-Royce Holdings, CRH, Berkeley Group, Barratt Developments and M&G also rose sharply.
On the other hand, Ocado Group, Fresnillo, AstraZeneca Pharma and Glencore declined sharply.
In the German market, Infineon Technologies, HeidelbergCement, Bayer, Beiersdorf, SAP, Adidas, Lufthansa, RWE, Deutsche Bank and Fresenius gained 1.5 to 4%.
In France, Air France KLM climbed more than 5%. Unibail Rodamco and STMicroElectronics gained 4 to 5%, while Peugeot, Societe Generale, Danone, WorldLine, Sanofi, Dassault Systemes, LOreal, Atos, Kering, Credit Agricole, Renault, BNP Paribas, ArcelorMittal, Bouygues, Vinci and Airbus Group gained 1.5 to 3%.
In economic news, the UK budget deficit rose to the third highest level since records began in 1993, the Office for National Statistics reported Tuesday.
The budget deficit excluding public sector banks widened by GBP 26 billion from the last year to GBP 31.6 billion in November.
At the same time, largely due to a GBP 5.9 billion additional expenditure on coronavirus job support schemes, central government bodies spent GBP 80.6 billion on day-to-day activities in November.
During April to November, public sector net borrowing surged GBP 188.6 billion to GBP 240.9 billion, the highest borrowing in any April to November period since records began in 1993.
Official data showed the U.K. economy rebounded at a faster than estimated pace in the third quarter, reflecting the effects of the easing of lockdown restrictions and also some recovery of activity from the steep contraction in April.
Gross domestic product grew by a record 16% sequentially instead of 15.5% expansion estimated previously. GDP had fallen by revised 18.8% in the second quarter.
Although this reflects some recovery of activity following the record contraction in the second quarter, GDP was 8.6% below where it was at the end of 2019. The annual fall in GDP was revised to 8.6% from 9.6% in the third quarter.
German consumer confidence is set to fall in January due to the severe lockdown measures introduced to withstand the second wave of Covid-19 infections, survey results from the market research group GfK showed.
The forward-looking consumer sentiment index fell to -7.3 in January from -6.8 in December. The score was forecast to drop to -8.8.
On the Brexit front, trade deal talks are now in a critical stage, with the European Union's Brexit negotiator Michel Barnier saying the EU remained committed to achieving 'a fair, reciprocal and balanced agreement'.
In stimulus news, the United States passed a long-awaited stimulus package that would send billions of dollars to American households and businesses grappling with the economic and health toll of the coronavirus pandemic. President Donald trump is soon expected to sign it into law.
Copyright RTT News/dpa-AFX