European shares slip after vaccine-driven rally

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 13, 2020. REUTERS/Staff

(Reuters) – European stocks eased from eight-month highs on Tuesday as tighter coronavirus restrictions across the continent halted a market rally that was powered by encouraging COVID-19 vaccine updates.

The pan-European STOXX 600 index .STOXX slipped 0.1% by 0808 GMT. It closed at it highest level since Feb. 27 on Monday after positive data from drugmaker Moderna’s MRNA.O COVID-19 vaccine.

Near-term economic outlook remains hazy, with Sweden moving to restrict the size of public gatherings as COVID-19 cases spike and a British medical adviser suggesting strengthening the three-tier system of restrictions when the full lockdown in England ends.

European banks .SX7P retreated after a more than 3% surge. BBVA BBVA.MC fell 3.4% after it and smaller rival Sabadell SABE.MC said they were in talks to create Spain’s second-biggest domestic lender by assets.

Oil and gas .SXEP and travel .SXTP stocks also slipped.

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