MILAN/FRANKFURT: European shares posted their best day in six weeks on Tuesday, rebounding from a sharp sell-off as optimism around Brexit and US stimulus helped to allay worries of a further hit to the global economy from a new coronavirus variant in Britain. The pan-European STOXX 600 index finished up 1.2% on broad-based gains, recovering from a more than 2% slide in the previous session, which was also its biggest one-day drop in nearly two months.

The European Union is giving a "final push" in a bid to strike a Brexit trade deal with Britain, its chief negotiator said on Tuesday, with the two sides inching towards agreement on fishing - a major sticking point - days before the end of Britain's transition deal since it left the bloc. Helping London's blue-chip index reverse early losses, data showed Britain's economic recovery from its coronavirus crash was quicker than previously thought in the third quarter. The index closed 0.6% higher, breaking a three-day losing streak. The losses were triggered by the emergence of a fast-spreading new coronavirus variant in Britain, which has forced wider lockdowns there and led countries around the world to close their borders to the UK. The EU on Tuesday recommended rolling back border closures to allow freight to resume.

AstraZeneca was the biggest weight on the pan-region index, down 1.5% after its experimental asthma drug developed with US partner Amgen failed to meet the main goal of a late-stage trial.