European stocks closed higher on Tuesday following a rally on Wall Street in the previous session.
The pan-European Stoxx 600 index ended up 0.76%, with most sectors and major bourses in positive territory.
Sentiment in Europe has been buoyed by a rally in U.S. stocks on Monday that came after President Donald Trump signed a $900 billion coronavirus relief package into law; the measure includes a direct payment of $600 to most Americans.
Trump had previously demanded a $2,000 direct payment days before the signing. The House voted Monday to increase the second round of federal direct payments to $2,000, leaving it up to the GOP-controlled Senate. U.S. stock futures were higher early Tuesday morning following the rally.
Positive sentiment in Europe comes after a Brexit trade deal was agreed between the EU and U.K. on Christmas Eve. London's FTSE 100 index traded nearly 2% higher Tuesday. On Monday, the 27 ambassadors from EU member nations formally approved the deal that will be implemented on Jan 1.Â
Drugmaker AstraZeneca was among the best performers on the FTSE index Tuesday afternoon with its shares up 3.8%. The company's coronavirus vaccine is expected to be approved for use in the U.K. this week.
The Financial Times reported Sunday that government officials confirmed that the U.K.'s drug regulator, the Medicines and Healthcare products Regulatory Agency, would imminently approve the vaccine, saying the announcement could come as soon as Tuesday.
Meanwhile, stocks in Asia-Pacific were mixed in Tuesday trade following the gains on Wall Street. In Japan, the Nikkei 225 gained 2.66% — trading at levels not seen since August 1990, according to data from Refinitiv. Shares of index heavyweight Fast Retailing and conglomerate Softbank Group gained more than 4% each. The Topix index advanced 1.74%.
There are no major earnings or data releases Tuesday.
- CNBC's Fred Imbert and Eustance Huang contributed to this market report.