Europe midday: Shares hold gains as Brexit talks continue

European shares maintained strong gains at lunchtime on Monday as an extension in the long-running Brexit trade talks boosted sentiment.

EU and UK leaders agreed to keep talking beyond Sunday's UK-imposed deadline. On Monday the bloc's Brexit negotiator Michel Barnier reportedly told envoys in Brussels that British Prime Minister Boris Johnson had made a key concession over the weekend.

Barnier said the prime minister’s acceptance of the need for a treaty-level mechanism to ensure fair competition as regulatory standards diverge over time had unlocked the talks. His comments came despite suggestions from Downing Street that a no-deal exit remains likely, the Guardian reported

The STOXX 600 index rose 1.06% with most bourses up by a similar margin. The UK FTSE 100 index was lagging, up, 0.48%, as the pound strengthened against the dollar and euro, hitting the export-heavy index.

It was also held back on a slide in AstraZeneca shares after the pharma giant said it was buying US drugmaker Alexion Pharmaceuticals for $39bn.

EU and UK leaders decided to extend talks beyond a Sunday deadline in an attempt to “go the extra mile” and secure a deal.

US futures were higher as the first Covid-19 vaccines started to roll out of storage in what will be America's largest ever immunisation programme.

In equity news, shares in Polish video game publisher CD Projekt slumped after its highly-anticipated title Cyberpunk 2077 was criticised for glitches and bugs in performance. The sci-fi role-playing game sold more than 8 m copies in pre-orders before launch.

On the upside housebuilders and banks all gained on the Brexit news with Vistry, Taylor Wimpey, Persimmon Barratt, Redrow, Lloyds, NatWest and Barclays all higher.

"British banks with high exposure to the UK economy and property market remain high beta Brexit stocks. Likewise, housebuilders popped 5% higher on Brexit deal hopes. These stocks are a leveraged bet on the UK economy, which in the near-term at least is going to be at the mercy of a Brexit trade deal and the vaccination programme," said Markets.com analyst Neil Wilson.