UPDATE 2-European shares cheer Brexit trade talks extension; AstraZeneca drops

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* AstraZeneca shares fall on $39 billion Alexion bill
* EU, UK extend Brexit trade talks beyond Sunday deadline
* German shares jump 0.8%, best session in three weeks
* Germany prepares stricter lockdown, stay-at-home shares
surge
* U.S. to begin administering Pfizer-BioNtech COVID-19
vaccine

(Updates to close)
By Susan Mathew
Dec 14 (Reuters) - European shares rose on Monday as a
decision to extend trade talks between Britain and the European
Union kept hopes of an eventual deal alive, but gains in
London's blue-chips lagged a higher pound and a near 6% drop in
AstraZeneca weighed.
With banks .SX7P in the lead, Europe's benchmark STOXX 600
index .STOXX rose 0.4% after breaking a five-week winning
streak to end 1% lower last week.
Optimism also stemmed from hopes of an end to the COVID-19
pandemic as the United States was set on Monday to begin
inoculating its citizens with the Pfizer-BioNtech vaccine. Last
week, Britain became the first Western nation to begin mass
vaccinations. MKTS/GLOB
EU Brexit negotiator Michel Barnier said a new trade pact to
govern around $1 trillion in trade with Britain, currently free
from tariffs and quotas, was still possible as leaders from both
sides decided to extend talks beyond a Sunday
deadline. But as fishing in UK waters and how to safeguard fair
competition remained sticking points, UK Prime Minister Boris
Johnson sounded sceptical of a breakthrough less than three
weeks ahead of the five-year finale to Britain's exit from the
bloc.
"While a deal still feels (narrowly) more likely than not,
the timing remains up in the air," said James Smith, developed
markets economist at ING.
"Politically speaking, there's not much to stop talks
running very close to the New Year's deadline."
London's FTSE 100 .FTSE was range-bound, and ended the
session 0.2% lower as a rising pound, declining energy shares
and AstraZeneca AZN.L restrained the market. .L O/R GBP/
AstraZeneca posted its worst session in nine months as
investors priced in the British drugmaker's move to buy U.S.
drugmaker Alexion Pharmaceuticals ALXN.O for $39 billion.
German stay-at-home stocks gained after a new lockdown was
announced to rein in the spread of COVID-19. Most stores will be
closed in Germany from Wednesday until at least Jan. 10,
Chancellor Angela Merkel said on Sunday, cutting short the busy
Christmas shopping season. Shares in online fashion retailer Zalando ZALG.DE and
food delivery firm Delivery Hero DHER.DE surged 6.7% and 4.7%,
respectively. The blue-chip DAX index .GDAXI was up 0.8%,
logging its best session in three weeks.
"In the short term (the lockdown) will be a blow to activity
and confidence even if the damage will be limited by knowledge
of the imminent vaccine roll-out," said strategists at Deutsche
Bank (DB) led by Jim Reid.