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Jan 21 (Reuters) - European stocks extended gains on Thursday on hopes of a large U.S. stimulus plan under new President Joe Biden, while investors looked to the European Central Bank (ECB) for clues on the eurozone's economic health.

The pan-European STOXX 600 index rose 0.7% by 0807 GMT, hitting new highs since February, with automakers banks and industrial companies gaining the most.

Asian and Wall Street peers hit record highs after Biden took office on Wednesday and signed half a dozen executive orders that included America's return to the international Paris Agreement to fight climate change.

Meanwhile, the ECB is widely expected to keep its easy money policy unchanged later in the day, but hold the door wide open to further stimulus as the spreading second wave of COVID-19 dims an already weak outlook.

Among individual shares, Sandvik gained 1.3% after the metal-cutting tools and mining gear maker reported quarterly earnings above analysts' forecasts.

Spanish cellphone mast operator Cellnex rose 3.2% and German telecoms group Deutsche Telekom rose 0.7% after the two companies announced to combine their tower business in the Netherlands.

(Reporting by Amal S in Bengaluru; Editing by Arun Koyyur)

((Amal.S@thomsonreuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 6749 3677;))