UPDATE 2-Brexit, vaccine optimism buoy European shares; FTSE 100 lags on new pandemic curbs

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* UK heading towards Brexit deal with EU - BBC
* EMA to convene on Dec. 21 to discuss vaccine approval
* Auto sectors lead gains as Volkswagen jumps 7.6%
* German DAX jumps 1% for best session in 3 weeks
* H&M drop after Q4 sale hit by pandemic

(Updates to close)
By Susan Mathew
Dec 15 (Reuters) - European shares rose on Tuesday, after
the European Union moved up the date to approve a COVID-19
vaccine, while London's blue-chips lost as stricter COVID-19
restrictions tied in with a higher pound on Brexit trade deal
hopes.
London's FTSE 100 .FTSE lost 0.3% as the pound gained on a
report that British and European Union negotiators may be
closing in on a deal. .L GBP/
Meanwhile, London moved into England's highest tier of
COVID-19 restrictions, with a new variant of the coronavirus
likely causing increased infection rates. This comes as data
showed existing curbs caused Britain's jobless rate to rise in
October. "Tier 3 lockdown measures being implemented in London will
deal yet another blow for the UK retailers, with festive
shopping likely to shift online," said Joshua Mahony, senior
market analyst at IG.
The EU said on Tuesday it was on course to approve its first
COVID-19 vaccine before Christmas after its drug regulator
brought forward a deadline for review following the start of
immunisation campaigns in the United States and Britain.
This helped investors look past new curbs in Germany and
Italy as well and pushed the pan-European STOXX 600 index
.STOXX up 0.3%, while Germany's DAX .GDAXI jumped 1% for its
best day in three weeks.
Volkswagen VOWG_p.DE led gains on the index, up 7.6%,
after its supervisory board said Chief Executive Herbert Diess
had its full support as he leads a new team, averting a
leadership crisis. This sent Europe's auto sector .SXAP up 3%.
The basic material sector .SXPP rose 2.1% with
ArcelorMittal MT.AS surging following an upgrade from Societe
Generale, while Umicore UMI.BR rose after raising its annual
guidance. Investors also await the outcome of the U.S. Federal
Reserve's two-day meeting set to begin on Tuesday as Washington
struggles to pass a fiscal stimulus.
Among other stocks, H&M shares HMb.ST dropped almost 3%
after the world's second-biggest fashion retailer said
local-currency sales fell 10% in its fourth quarter, with a big
slowdown in the final month due to the pandemic.
But retail sector .SXRP losses were tempered by a 3% jump
in JD Sports JD.L after the sportswear retailer said it bought
U.S. retailer Shoe Palace for $325 million.