UPDATE 2-FTSE 100's surge on UK vaccine approval pulls European shares off lows

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* UK first country to approve Pfizer-BioNtech COVID-19
vaccine
* FTSE up 1.2%; STOXX 600 flat
* Germany plans to extend coronavirus restrictions
* LSE set to win EU antitrust approval for $27 bln Refinitiv
buy

(Updates to close)
By Susan Mathew
Dec 2 (Reuters) - European shares erased session losses to
close flat on Wednesday on an over 1% surge in London blue-chips
after UK became the first country to approve Pfizer and
BioNtech's COVID-19 vaccine.
London's FTSE 100 .FTSE outperformed most regional peers,
after Britain said the vaccine will be rolled out from next
week, and as the pound slumped on Brexit trade deal uncertainty.
.L GBP/
The pan-European STOXX 600 index .STOXX ended steady with
London's Rio Tinto RIO.L , BHP Group BHPB.L HSBC HSBA.L
among the biggest boosts.
BioNtech's Frankfurt-listed shares 22UAy.F jumped 4%,
compared with a 0.5% fall for Germany's benchmark DAX index
.GDAXI , which lagged the most in the region.
Germany is planning to extend restrictions on restaurants
and hotels until Jan. 10, sources familiar with discussions
between the federal government and 16 states said on Wednesday.
"Lengthening (of curbs) would extend the damage done to
economic activity. This means that a longer period of subdued
activity will impact factors like unemployment, incomes and
bankruptcies, ultimately causing the recovery to take longer,"
said Bert Colijn, senior economist, Eurozone at ING.
Data on Wednesday showed euro zone unemployment in October
fell as the economy continued to recover before the second wave
of the COVID-19 pandemic struck. ING warns the unemployment rate points to a very mild labour
market impact from the crisis so far, which brings upside risk
to the GDP outlook for next year.
Spanish stocks .IBEX closed up 1% near levels last seen in
early March. Spain's economic recovery that started in the third
quarter most likely continued this quarter, Economy Minister
Nadia Calvino said. Among individual stocks, the London Stock Exchange LSE.L
jumped 9.6% after sources said the company is set to win EU
antitrust approval for its $27 billion acquisition of data
analytics company Refinitiv.
Investors kept an eye on moves by Britain and the European
Union as Brexit trade talks were still stuck.
Envoys of EU's member states on Wednesday urged the bloc's
chief Brexit negotiator to not be rushed into an unsatisfactory
agreement.