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* Pfizer-BioNTech seek EU emergency approval for COVID-19 vaccine

* China's Nov. factory activity growth hits decade high

* Bipartisan lawmakers propose $908 bln COVID relief bill

* Zoom falls after warning of gross margin pressure

* Indexes up: Dow 1%, S&P 1.3%, Nasdaq 1.1%

Dec 1 (Reuters) - The S&P 500 and the Nasdaq hit record highs on Tuesday as hopes that a COVID-19 vaccine will be available soon and better-than-expected factory data from China bolstered bets of a speedy economic recovery.

Investors are closely following updates on a handful of vaccine candidates as well as the start of global shipments as drugmakers submit paperwork for regulatory approvals.

Pfizer Inc gained about 3.6% as the drugmaker and Germany's BioNTech SE sought emergency approval of their vaccine candidate from the European regulator.

The partners are neck-and-neck with rival Moderna, which jumped 5% after announcing it would ask the regulator to recommend conditional approval for its shot.

"The optimism continues to build for a vaccine to come out and be very successful... There is this expectation that you're going to see a global synchronized recovery next year," said Larry Adam, chief investment officer at Raymond James.

Earlier in the day, global equities got a boost from data that showed China's factory activity in November increased at its fastest pace in a decade. Several other countries also reported sharp upticks in factory activity.

In the United States, a slowdown in manufacturing activity for the month failed to discourage investors. All major S&P sectors rose with the economically-sensitive energy and financials leading gains.

Market participants were also focused on remarks by U.S. Treasury Secretary Steve Mnuchin and Federal Reserve Chair Jerome Powell at the Senate Banking Committee, where they agreed on the need for more aid for small businesses.

Mnuchin and House of Representatives Speaker Nancy Pelosi are due to speak later in the day about COVID-19 relief and government funding, which expires this month.

"Markets are excited to see that communication has begun once again," said Thomas Hayes, managing member at Great Hill Capital in New York.

"This is about the next handful of weeks and months to keep businesses open, to keep people employed until the pent up demand is unleashed."

Meanwhile, a bipartisan group of U.S. lawmakers proposed a $908 billion relief bill that would fund measures through March 31, including additional aid for hotels, restaurants and other small businesses.

At 11:40 a.m. ET, the Dow Jones Industrial Average rose 307.30 points, or 1.04% , to 29,945.94, the S&P 500 gained 47.44 points, or 1.31 %, to 3,669.07 and the Nasdaq Composite gained 140.71 points, or 1.15 %, to 12,339.45.

After the three main stock indexes gained more than 10% each in November, market participants said Wall Street's rally still has room to run in December, which is seasonally a good month for stocks.

Among stocks, Zoom Video Communications Inc tumbled 12% after the company warned its gross margins would remain under pressure going into 2021.

Tesla Inc rose 2.3% after S&P Dow Jones Indices said it would add one of Wall Street's most valuable companies to the S&P 500 index all at once on Dec. 21.

Micron Technology advanced 6.2% as the chipmaker increased its revenue, gross margin and earnings forecast for the first quarter of 2021.

Advancing issues outnumbered decliners by 2.9-to-1 on the NYSE and by a 1.5-to-1 on the Nasdaq.

The S&P 500 posted 40 new 52-week highs and no new low, while the Nasdaq recorded 258 new highs and nine new lows. (Reporting by Shriya Ramakrishnan and Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur)