European shares held near eight-month highs on Tuesday as a possible easing of lockdowns in France added to a brighter mood from encouraging developments related to coronavirus vaccines.
The pan-European STOXX 600 index was up 0.7pc at 0915 GMT, supported by strong gains in the travel sector and oil & gas stocks after crude prices hit their highest levels since late March.
Global market sentiment also got a boost after U.S. President-elect Joe Biden was given the go-ahead to begin his White House transition.
The benchmark index has gained nearly 45pc from a coronavirus-driven slump in March and is on track to record its best month this year, helped by news of vaccine breakthroughs and a Biden victory in the U.S. election, which has raised hopes for a more stable U.S. trade policy towards the region.
"Investors are drowning out the noise of potential near-term risk and purely focusing on the vaccine optimism coupled with positive political developments from the U.S." said Craig Erlam, senior market analyst at OANDA.
France's benchmark CAC 40 surged 1.1pc after the country on Monday reported its lowest daily tally of COVID-19 infections since Sept. 28.
Investors will now focus on a speech by President Emmanuel Macron later in the day when he may announce a relaxation of lockdown rules.
Germany's DAX rose 0.9pc, with exchange operator Deutsche Boerse revealing that the blue-chip index will expand to 40 from the current 30 companies with tougher membership criteria.
Data showed Germany, Europe's largest economy, grew by a record 8.5pc in the third quarter, but the outlook remains clouded by a second wave of virus infections and a partial lockdown to slow the spread of the disease.
British domestic stocks climbed 0.8pc, after England said it will introduce a new system allowing the use of testing to shorten quarantine requirements for incoming passengers.
The news further lifted stocks of airlines, travel and tourism companies, which have suffered as strict quarantine rules deterred people from travelling.
Shares of British Airways owner IAG gained 5.4pc, with the airline saying the new scheme was "a significant step in the right direction".
JD Sports fell 3.5pc on reports the group was in exclusive talks with British department store chain Debenhams over a potential rescue takeover.
Compass Group gained 3.9pc even as the catering firm reported a 75.5pc slump in annual pretax profit, and said it would continue to "resize" its business.