German stocks rose on Tuesday as hopes for an eventual Brexit trade deal prevailed and factory output and retail sales data from China indicated steady recovery in the world's top metals consumer.
Underlying sentiment, however, remained cautious amid rising Covid-19 cases and tighter curbs across the continent.
Germany and the Netherlands announced tighter restrictions over Christmas in a bid to curb a sharp rise in infections.
London will move into England's highest tier of Covid-19 restrictions on Wednesday, with additional curbs on restaurants and socializing due to increased infection rates that may be partly linked to a new variant of the coronavirus.
The benchmark DAX rose 59 points, or half a percent, to 13,283 after gaining 0.8 percent on Monday.
Sugar producer Suedzucker fell 2.5 percent after cutting its FY outlook.
Retail group Metro AG jumped nearly 5 percent after reporting a rise in full-year 2020 net income.
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