UPDATE 2-Transatlantic dealmaking sends European shares back to four-year peak

* LVMH's $16.2 bln deal for Tiffany lifts luxury stocks
* Novartis gains on $9.7 bln deal to buy heart drug maker
* All major country indexes, European sub-sectors higher

(Updates to close)
By Medha Singh
Nov 25 (Reuters) - European shares posted their best day in
six weeks on Monday, as transatlantic deals by Louis Vuitton
owner LVMH and Swiss drugmaker Novartis, as well as hopes that
the United States and China would seal a trade deal, boosted
sentiment.
Shares of LVMH LVMH.PA rose 2% as the French firm agreed
to buy U.S. jeweller Tiffany TIF.N for $16.2 billion in its
biggest acquisition yet. Tiffany's lower-priced rival, Denmark's Pandora A/S
PNDORA.CO , gained 1%, while other luxury goods makers such as
Gucci parent Kering PRTP.PA , Italian jacket maker Moncler
MONC.MI and London's Burberry BRBY.L gained between 0.4% and
2.7%.
"Some companies in the retail sector have complained about
softer demand, but luxury brands tend to hold up well when
economies cool as the mega rich usually fare better in a cooler
economic climate," said David Madden, analyst at CMC Markets in
London.
Novartis NOVN.S shares were a big boost to the STOXX 600
.STOXX index on the back of the drugmaker's $9.7 billion
takeover of The Medicines Co MDCO.O , which seeks to expand its
portfolio of medicines treating cardiovascular diseases.
Travel and leisure .SXTP and healthcare .SXDP led gains
across European sub-sectors, which were all in the positive
territory.
The pan-European STOXX 600 .STOXX closed 1% higher at a
four-year peak, as major stock indexes in United States hit
record highs .IXIC .SPX . .N
The benchmark index bounced back from last week's marginal
loss, which had broken a run of a six straight weeks of gains,
fuelled largely by hopes of a trade deal.
A report that said China and the United States were very
close to a "phase one" deal added to optimism from Friday, when
leaders of both nations had expressed their interest in a deal.
China also said on Sunday it would seek to improve
protections for intellectual property rights, a major demand of
the United States in trade negotiations.
"China has appeared to relent to a degree on intellectual
property, a key sticking point to the talks thus far," said Neil
Wilson, chief market analyst at Markets.com. "This could be an
important step forward, but we as ever will only believe it when
we see it."
Among other stocks, Prysmian PRY.MI gained about 5% after
the cable maker's troubled Western Link high voltage connection
was taken over by clients, reducing further the near-term risk
for the company.
Spain-based wind turbine maker Siemens Gamesa SGREN.MC
jumped more than 8% after Bloomberg reported that Germany's
Siemens SIEGn.DE was considering buying Iberdrola's IBE.MC
8% stake in the company. In economic data, the Ifo economic institute said business
morale in Germany improved in November, but indicated that
manufacturing in Europe's powerhouse was still stuck in a
recession.