European shares hovered at eight-month highs on Tuesday on optimism around signs of a breakthrough in developing a COVID-19 vaccine, although concerns about the depth of the economic damage from the pandemic capped gains. The pan-European STOXX 600 was flat after rallying 4% in the previous session as U.S. drugmaker Pfizer Inc said its COVID-19 vaccine, developed with German partner BioNTech SE, was more than 90% effective in preventing the infection. “The results of the Pfizer study are certainly welcome news, however, one swallow does not make a summer and there still remains some way to go before life can return to any semblance of normal,” said Michael Hewson, a market analyst at CMC Markets UK. European shares have already surged 11% this month as investors also cheered the possibility of calmer global trade under U.S. President-elect Joe Biden, but strict lockdowns to contain surging coronavirus cases have threatened a nascent economic recovery at home. Data on Tuesday showed British employers made a record number of staff redundant in the third quarter and the jobless rate jumped. London’s export-laden FTSE 100 was up 0.6% by 0835 GMT. Italy’s bourse added 0.1% a day after posting its best day since March. The country is ramping up business restrictions in Tuscany and four other regions to rein in the second wave of the pandemic. Banking, travel and leisure, and energy stocks were among the biggest gainers in morning trading after clocking gains of more than 7% on Monday. “Even if a vaccine proves effective, inoculating a large enough part of the population will take time and leave these segments prone to economic lockdown fallout,” Commerzbank analyst Christoph Rieger said. Investor attention has also been on Brexit trade talks with Britain’s transition period set to expire by the end of the year. UK Prime Minister Boris Johnson suffered a heavy defeat in parliament’s upper chamber on Monday over proposed laws which would allow him to breach the exit treaty. Focus later in the day will be on a reading of the German investor sentiment for November. Economists expect sentiment to have ticked lower following a bigger-than-expected slump in October. In company news, shares of shopping mall owner Unibail-Rodamco-Westfield surged 28.4% to the top of the STOXX 600 after its shareholders voted against a planned 3.5 billion euro ($4.15 billion) rights issue. German sportswear firm Adidas lost 2.5% even as it said it expects sales to return to growth in China in the fourth quarter.