European markets climb following positive global trend; EU signals progress on Brexit talks

European stocks advanced on Wednesday, following a positive trend on Wall Street on Tuesday and in Asia Pacific markets overnight.

The pan-European Stoxx 600 climbed 0.9% by early afternoon trade, with autos adding 2.5% to lead gains as all sectors and major bourses entered positive territory.

European Commission President Ursula von der Leyen said Wednesday that there had been progress in talks over a post-Brexit trade agreement with the U.K. and the next few days would be “decisive,” offering a boost for stocks early in the session. Sterling and the euro both jumped on the remarks, hitting $1.35 and $1.22 respectively.

The positive trend had been set for European markets after gains on Wall Street Tuesday, bucking a negative trend in recent sessions. The Dow Jones Industrial Average climbed nearly 340 points, helped by a 5% jump in Apple’s stock, while the S&P 500 climbed 1.3%, snapping a four-day losing streak.

U.S. stock futures are pointing to a slightly higher open on Wednesday, as investors cling to the possibility of new fiscal stimulus before the end of the year. Investors stateside will also be looking out for the Federal Reserve’s comments on Wednesday about the future of the U.S. economy.

While the Fed’s long-term view is expected to be improved due to the vaccine, the central bank is expected to sound very dovish at the end of its meeting.

Stocks in Asia-Pacific were higher in Wednesday trade following an overnight bounce on Wall Street as optimism grew over the prospect of more stimulus in the wake of the Covid-19 pandemic.

House Speaker Nancy Pelosi invited congressional leaders, including Senate Majority Leader Mitch McConnell, to discuss government funding and the relief package on Tuesday. McConnell later told reporters as he was leaving the Capitol that “significant progress” was being made, according to NBC News.

Back in Europe, the surge in coronavirus cases is also a key focus for investors with several major economies, including Germany, Italy and the Netherlands, changing Christmas plans to relax restrictions in order to curb a sharp rise in cases.

On Wednesday, Germany is starting its Christmas lockdown in which schools and nonessential shops must close. The U.K. too is reconsidering plans to relax rules to allow families to gather over the festive period after high-profile criticism of the move.

Business activity in the euro zone was better than expected in December, but still contracted, according to a preliminary data release Wednesday. The flash euro zone PMI (purchasing managers index) composite output reading, which looks at activity in both manufacturing and services sectors, came in at 49.8 in December, up from 45.3 in November. A reading below 50 still indicates a contraction in business activity, however.

In terms of individual share price movement, telecoms and cable group Altice Europe soared more than 23% after its founder increased a buyout offer to take the company private.

At the bottom of the European blue chip index, shares of Belgian pharmaceutical company Galapagos plunged more than 14% after U.S. partner Gilead opted not to seek approval for a rheumatoid arthritis drug, according to Reuters.