European stocks traded higher on Monday, alongside U.S. equity futures, with investors encouraged by COVID-19 vaccine progress and hopes for a stimulus deal out of Washington. No collapse in Brexit talks also lifted sentiment.

The Stoxx Europe 600 index
SXXP,
+0.94%

rose 0.8% after the index logged a 1% loss last week, snapping a five-week winning streak. The German DAX
DAX,
+1.08%

and the French CAC 40
PX1,
+1.08%

were up 0.9% each.

Gains were less pronounced for the FTSE 100 index
UKX,
+0.31%
,
which rose just 0.2% as the pound surged against the dollar, last up 1.2% to $1.3372. U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen, agreed on Sunday to go “the extra mile” to reach a post-Brexit trade deal.

The two said that discussions would continue as the legal deadline of Dec. 31 looms. And while Johnson pointed out that both sides remain “very far apart,” he said the U.K. wouldn’t be “walking away from the talks.”

“So, with the worst case, no Brexit deal global risk reset this morning, investors can breathe a morning sigh of relief as temporary as it might be,” said Stephen Innes, global chief market strategist at Axi, in a note to clients.

Elsewhere, U.S. stock futures
ES00,
+0.65%

YM00,
+0.76%

NQ00,
+0.44%

climbed. A bipartisan group of U.S. lawmakers will present a two-part $908 billion stimulus proposal on Monday, Bloomberg reported, citing a source. One part will consist of a deal worth $160 billion that includes the stickiest issues of state and local aid and liability shields for businesses, while the larger other part is a $748 billion package that covers measures that are less controversial.

Treasury Secretary Steven Mnuchin and Speaker of the House Nancy Pelosi spoke by phone on Sunday to discuss stimulus and agreed to speak again on Monday, her deputy chief of staff, Drew Hammill said via Twitter.

Investors were finding strength in COVID-19 vaccine news. Vials of the candidate from drug company Pfizer
PFE,
-1.46%

0Q1N,
-4.52%

and its partner BioNTech
BNTX,
-1.73%

are now making their way to distribution sites in the U.S. as the nation’s pandemic deaths near 300,000. The first vaccinations could come in the next few weeks.

Shares of AstraZeneca
AZN,
+0.71%

AZN,
-6.13%

slid over 6%. The pharmaceutical group said over the weekend it will buy Boston-based Alexion Pharmaceuticals
ALXN,
+1.78%

for $39 billion in cash and stock. The deal would boost the U.K. drug company’s presence in immunology and rare diseases. It also comes as AstraZeneca is in the late stages of developing a COVID-19 vaccine with the University of Oxford. 

Shares of GlaxoSmithKline
GSK,
-1.00%

GSK,
-1.09%

also fell, dropping 1%. The U.K. pharmaceutical group said on Friday that it would delay the launch of a COVID-19 vaccine that it is developing with French drug company Sanofi
SNY,
-3.84%

SAN,
-0.52%

until the end of 2021, after the first trials showed an insufficient response in older patients.

As Christmas nears, Europe also continues to struggle with the pandemic. Germany plans to enter a hard lockdown as COVID-19 cases continue to climb, with small exceptions only to be made for Christmas. The epicenter of Europe’s outbreak in the spring — Italy — has now overtaken the U.K. as the country with the region’s highest death toll from the disease.

Shares of Vivendi
VIV,
+1.48%

rose 1%, after the French media conglomerate said on Monday it has entered into exclusive negotiations with Bertelsmann for the acquisition of the German media conglomerate’s Prisma Media unit.

Major oil companies were helping drive gains for European stocks, as oil prices
CL.1,
+0.90%

rose. Shares of Royal Dutch Shell
RDS.A,
-1.59%

RDSA,
+0.76%

and BP
BP,
-1.70%

BP,
+1.80%

rose over 1% each.

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