Stimulus Hopes, Vaccine Progress Helps Lift Stocks

European and US stock markets mostly rose Tuesday on optimism over US stimulus talks and vaccines, but London stumbled ahead of the capital's tightened coronavirus restrictions and as dealers also tracked Brexit trade talks.

The tech-dominated Nasdaq powered to a fresh record following a bullish session on Wall Street, bolstered by reports congressional leaders were set to meet in person Tuesday afternoon for the first time in months to try to advance a fiscal spending package after numerous earlier failures to reach agreement.

Meanwhile, the British pound rose as Brussels and London continued to pursue extended talks for a long-awaited Brexit trade deal.

"Recent tones out of the EU have highlighted the potential for a breakthrough if the UK and EU are willing to compromise," Joshua Mahony at IG said.

"However, investors were dealt a fresh dose of reality today after (British Prime Minister Boris) Johnson admitted that a no-deal is the most likely outcome at this point," he added.

London's FTSE 100 fell 0.3 percent as a strong pound hurt multinationals which dominate the index and whose earnings are mostly in dollars.

But in the eurozone the Paris CAC 40 nudged higher and in Frankfurt the DAX 30 climbed 1.1 percent as there was good news on the vaccine front.

The European Medicines Agency said on Tuesday it had moved forward a meeting to decide on authorization for the Pfizer-BioNTech vaccine by more than a week to December 21.

And in the US, a second coronavirus vaccine took a step towards emergency use approval when an FDA briefing document recommended experts give Moderna's jab a green light later this week.

Meanwhile, Asian equities closed lower as investors focused on surging Covid-19 infections that are forcing many governments to impose tighter containment measures.

London faces new tough restrictions as it follows swathes of Britain into the highest tier of containment, the Netherlands was preparing to enter its strictest lockdown since the pandemic began, and New York City could also soon be facing a "full shutdown."

Markets are looking ahead to Wednesday's conclusion of the final Federal Reserve monetary policy meeting of 2020.

The US central bank is not expected to change policy, but will update its members' forecasts, shedding light on how they view the risk from the latest spike in US coronavirus cases and the trajectory of the recovery once Covid-19 vaccines become more widely deployed.

Among individual companies, Apple jumped 5.0 percent following a Nikkei report that the tech giant plans a 30 percent boost in iPhone production for the first half of 2021.