UPDATE 2-European shares slip as jump in virus cases offsets vaccine hopes

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* AstraZeneca drops as vaccine efficacy rate lower than
peers
* Euro zone business activity falls sharply in November
* Cineworld surges on additional capital raising
* French bank Credit Agricole jumps on takeover deal

(Updates to close)
By Shashank Nayar and Shriya Ramakrishnan
Nov 23 (Reuters) - European shares closed lower on Monday as
investors weighed signs of progress in developing a COVID-19
vaccine against the threat of economic damage from sweeping
business restrictions to contain a surge in infections.
Boosting global equity markets earlier on Monday,
AstraZeneca Plc AZN.L said its COVID-19 vaccine, developed
along with the University of Oxford, could be around 90%
effective. But AstraZeneca's shares fell 3.8% as traders took into
account its lower efficacy rate compared with rivals such as
Pfizer PFE.N , which has so far reported the highest efficacy
rate of 95%, followed by Moderna 's MRNA.O 94.5%. The pan-European STOXX 600 index .STOXX ended down 0.2%
after having gained as much as 0.6% in morning trading.
"There is a significant chance of continuing lockdown
measures as the second wave isn't under control yet," said Bert
Colijn, senior economist for the euro zone at ING.
"That means that some form of lockdown in December will
continue to depress economic output before things actually start
getting better."
The benchmark index has gained nearly 40% from its March
lows, helped by a flood of stimulus measures, but gains remain
capped as data points to a faltering economic recovery from a
pandemic-induced recession.
Euro zone business activity contracted sharply in November
as new virus restrictions across European countries forced many
companies in the bloc's dominant service industry to close
temporarily, a survey showed. Manufacturing activity, however, remained a bright spot as
many factories remained open during lockdowns.
"The market seems to be looking through the current expected
growth dip and focusing on the synchronous economic recovery
next year," analysts at Berenberg said.
British domestic stocks were buoyed by hopes of a swifter
economic recovery, after the British government said it was
working with Scotland, Wales and Northern Ireland to ease
COVID-19 restrictions over Christmas. That helped the UK's domestically focused mid-cap index
.FTMC gain 0.4%, along with hopes of a post Brexit-trade deal
with the European Union. .L
Among individual stocks, Cineworld CINE.L , owner of the
U.S. Regal cinema chain, surged 20% after securing an additional
$750 million in funding to cushion itself against the impact of
the coronavirus as it aims to reopen next year. French bank Credit Agricole CAGR.PA jumped 4.1% after its
Italian unit launched an offer to buy Italian bank Credito
Valtellinese (Creval) PCVI.MI . Germany's HelloFresh HFGG.DE fell 3.3% after the company
said it bought Factor75, a U.S. provider of fully prepared
meals, for up to $277 million.