Leading European and US stocks rose on Monday, with the latest Brexit and vaccine developments boosting investors’ hopes.

UK and European Union leaders announced they would continue to negotiate despite another missed deadline in post-Brexit trade talks.

European Commission president Ursula von der Leyen and UK prime minister Boris Johnson reported a “constructive” phone call on Sunday, marking an improvement in tone on updates earlier last week.

WATCH: UK and EU agree to continue Brexit talks

Most indices were trading higher on Monday in Europe. Britain’s mid-cap FTSE 250 (^FTMC) rose 0.9%, Germany’s DAX (^GDAXI) 1% France’s CAC 40 (^FCHI) 0.5%.

It comes in spite of tougher lockdown restrictions being announced in London and other parts of south-east England from Wednesday. Curbs have also been increased in Germany.

“Markets reacted positively to news that the talks have not collapsed completely. Despite the pessimism surrounding the negotiations, markets still see hope for a last-minute deal between the EU and the UK,” said Milan Cutkovic, a market analyst at Axi.

The FTSE 100 (^FTSE) was an outlier however, closing down 0.1%. Gains for sterling on Monday likely offset hopes of progress on Brexit, as many leading companies on the index make most of their profits overseas in dollars.

READ MORE: US investors await Fed meeting and retail sales data

All three leading indices also made gains on Wall Street after the Pfizer (PFE) and BioNTech (BNTX) vaccine was approved by regulators on Friday. Vaccination programmes are likely to begin early this week.

“News that the USA has approved the Pfizer/BioNTech vaccine is another pivotal moment in the fight against the pandemic,” said Cutkovic. He also noted increased optimism about a stimulus package being signed off this year.

The S&P 500 (^GSPC) was 0.3% higher as the trading day ended in Europe, while the Dow (^DJI) gained 0.2% and the Nasdaq (NQ=F) jumped 1.1%.

Stocks had risen overnight in China, as finance minister Liu Kun said the government would ramp up fiscal stimulus. The Shanghai Composite (000001.SS) rose 0.7%.

Hong Kong’s Hang Seng (^HSI) lost 0.3%, while Japan’s Nikkei (^N225) gained 0.3%.

WATCH: What happens if no Brexit trade deal is struck?