UPDATE 2-European stocks jump on vaccine hopes, Democrats on cusp of Senate victory

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* Moderna COVID-19 vaccine gets green light in Europe
* Banks clock best day in two months
* Democrats win one U.S. Senate race in Georgia, lead in
another
* Euro zone contraction in December deeper than estimates

(Updates prices throughout, adds comments)
By Shreyashi Sanyal
Jan 6 (Reuters) - European stocks jumped on Wednesday after
a second COVID-19 vaccine won regulatory approval in the region,
while bets rose for bigger U.S. fiscal stimulus as Democrats
closed in on a Senate victory.
The pan-European STOXX 600 index .STOXX rose 1.4% to its
highest level since late February 2020, while the UK's FTSE 100
.FTSE rose 3.5% and Germany's DAX .GDAXI gained 1.8%.
Moderna Inc's MRNA.O vaccine, which won approval from the
European Medicines Authority (EMA) and later the European
Commission, is seen as a big boost for European hopes of
containing the coronavirus.
"Eurozone stocks were already in recovery mode this morning
and then the European Medicines Agency approved Moderna's
coronavirus vaccine for EU use so that added to the optimistic
sentiment," said David Madden, market analyst at CMC Markets in
London.
Economically-sensitive banks .SX7P surged 5.5%, logging
their best day in two months, with the UK's HSBC HSBA.L ,
Spain's Santander SAN.MC and France's BNP Paribas BNPP.PA
providing the biggest boosts.
Oil majors BP BP.L , Royal Dutch Shell RDSa.L and Total
TOTF.PA rose almost 6.5% as crude prices hit their highest
since February 2020 following Saudi Arabia's pledge to cut
output in a meeting with allied producers. O/R
Democrats won one U.S. Senate race in Georgia and led in
another, moving closer to a surprise sweep in a former
Republican stronghold that could usher in larger fiscal stimulus
and pave the way for President-elect Joe Biden to push through
greater corporate regulation and higher taxes. Construction & material stocks .SXOP such as CRH CRH.L
and HeidelbergCement HEIG.DE also outperformed on hopes of
more infrastructure spending under a Democrat-controlled Senate.
Germany is extending its lockdown until the end of the
month, while a third national lockdown should not be ruled out
in France, a senior medical expert said. Meanwhile, IHS Markit's survey showed economic activity in
the euro zone contracted more sharply than thought at the end of
2020 and could get worse as renewed lockdowns hit the bloc's
dominant service industry. In company news, French artificial heart maker Carmat
ALCAR.PA gained 9.5% after it said it was preparing to start
selling its products in the second quarter of this year.
British baker and fast-food retailer Greggs GRG.L jumped
7.9% as it slowed a sales decline caused by the coronavirus
crisis in the fourth quarter.