MILAN/FRANKFURT: European shares closed higher on Wednesday on upbeat regional business activity data, rising hopes of a Brexit trade deal and the possible roll-out of a Covid-19 vaccine on the continent before the new year.

Rallying for a third straight session, the pan-European STOXX 600 index closed 0.8% higher, having touched a near 10-month peak during the session.

Flash PMIs for December showed the euro zone economy far exceeded expectations, with manufacturers reporting strong growth fuelled by rising exports and a booming performance from Germany. However, the region’s largest economy headed into a stricter lockdown on Wednesday.

London’s FTSE 100 weathered a higher pound to rise 0.9% and break a three session losing run.

While most sectors in Europe rose, banks slid 1.1%, reversing some of the previous two sessions’ almost 3% gain. Spain’s lender-heavy IBEX ended in the red.

Auto stocks hit a near three-month high with German tire maker Continental surging 2.9% after it sharply raised it its medium term forecast for earnings before interest and taxes.

The German DAX stock index posted its best session in three months, up 1.5%.

Topping the index was a 23.3% jump in Altice Europe after its founder increased an offer to take the telecoms group private by 30%.—Reuters