UPDATE 2-European shares rebound as Brexit trade deal progress overshadows virus worries

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* Britain-EU rifts over fishing narrow
* U.S. Congress approves $892 bln pandemic aid package
* Tech stocks, banks lead broad-based gains in Europe
* AstraZeneca slips as asthma drug fails in late-stage trial

(Updates to close)
By Susan Mathew
Dec 22 (Reuters) - European shares posted their best day in
six weeks on Tuesday, rebounding from a sharp sell-off as
optimism around Brexit and U.S. stimulus helped to allay worries
of a further hit to the global economy from a new coronavirus
variant in Britain.
The pan-European STOXX 600 index .STOXX finished up 1.2%
on broad-based gains, recovering from a more than 2% slide in
the previous session, which was also its biggest one-day drop in
nearly two months.
The European Union is giving a "final push" in a bid to
strike a Brexit trade deal with Britain, its chief negotiator
said on Tuesday, with the two sides inching towards agreement on
fishing - a major sticking point - days before the end of
Britain's transition deal since it left the bloc.
"(The progress in fishing) highlights the willingness to
move towards something that will eventually break the current
deadlock," said Joshua Mahony, senior market analyst at online
trading platform IG.
Helping London's blue-chip index .FTSE reverse early
losses, data showed Britain's economic recovery from its
coronavirus crash was quicker than previously thought in the
third quarter. The index closed 0.6% higher, breaking a
three-day losing streak.
The losses were triggered by the emergence of a
fast-spreading new coronavirus variant in Britain, which has
forced wider lockdowns there and led countries around the world
to close their borders to the UK. The EU on Tuesday recommended
rolling back border closures to allow freight to resume.
"The COVID-led economic isolation of the UK (is) serving to
provide a heavy dose of reality of the kind of disruption that
could come if negotiators fail to agree a (Brexit trade) deal by
year-end," Mahony said.
Technology stocks .SX8P and Brexit-sensitive banks .SX7P
led the rebound in Europe, while materials stocks .SXPP lagged
as they tracked a decline in underlying commodity prices.
MET/L O/R
Meanwhile, U.S. President Donald Trump on Tuesday signed a
stopgap measure to fund U.S. agencies for another week after
Congress passed a long awaited $892 billion COVID-19 aid package
overnight.
AstraZeneca AZN.L was the biggest weight on the pan-region
index, down 1.5% after its experimental asthma drug developed
with U.S partner Amgen AMGN.O failed to meet the main goal of
a late-stage trial.