MILAN/FRANKFURT: European stocks inched higher on Tuesday on positive brokerage recommendations and gains in economically sensitive stocks on expectations of a larger US stimulus under incoming president Joe Biden.

The pan regional STOXX 600 index rose 0.2%, with oil and gas, travel and leisure and banking sectors leading the gains.

Biden will take office on Jan. 20 with his Democratic party in control of both Houses. In the previous session, investors booked profits following a rally last week after a Democrat sweep in the US Senate elections.

Travel stocks rose as French catering and food services group Sodexo gained 3.5% after J.P.Morgan upgraded the stock to "neutral".

Danish shipping company Maersk rose 3.7% after brokerage Berenberg upgraded the stock to "buy", saying earnings momentum driven by freight prices could see the stock run higher.

Automakers inched higher. French automaker Renault SA rose 1.2% after it said it started 2021 with a higher level of orders than 2019, while BMW was trading flat after posting an 8.4% drop in vehicles sales in 2020.

Swedish online gaming company Kindred jumped 5% after it reported strong business momentum through the fourth quarter.

London's exporter-heavy index inched 0.3% lower as sterling gained and as Britain battled a surge in new infections, hospitalisations and deaths. AstraZeneca slipped 1.7% even as Europe's drugs regulator said it will review the drugmaker and Oxford University's COVID-19 vaccine this month under an accelerated timeline.