Tom Swarbrick 10pm - 1am
UK and global markets surge following Covid vaccine breakthrough
9 November 2020, 14:56 | Updated: 9 November 2020, 15:28
UK and global stock markets have surged following the news of a potential breakthrough in the race to develop a coronavirus vaccine.
In London, the markets are on track for what could be their best day since March following Pfizer's announcement that its vaccine candidate can prevent 90 per cent of people from contracting Covid-19.
It comes following a similar economic boost in the wake of the long-awaited result of the US election, in which Joe Biden was eventually crowned victor despite Donald Trump's insistence otherwise.
The FTSE 100 jumped by more than five per cent on Monday afternoon, adding £82 billion to the value of its shares.
London's top market added about 330 points, setting it on course for the best day since 24 March.
Meanwhile, companies hit hard by the pandemic - such as British Airways owner IAG and engine maker Rolls-Royce - jumped on the hope that a vaccine could help the economy move closer to normality.
On the FTSE 250, Cineworld rose by 38 per cent, Trainline added 33 per cent, and easyJet, Tui and cruise operator Carnival were up about 28 per cent.
However, beneficiaries of the crisis saw their shares take a hit on Monday. Ocado dropped by 8.5 per cent, Just Eat Takeaway lost more than five per cent, and Reckitt Benckiser, which makes Dettol, fell five per cent.
Pfizer's rival in the race for a vaccine, AstraZeneca, was trading flat on a day where most companies were enjoying an uptick.
The index had already been up earlier in the day after traders returned to work from the news that Mr Biden looks all but set to become the next US president, despite several states being left to declare and the incumbent president presenting legal challenges over the result.
Preliminary news that the Pfizer/BioNTech vaccine is effective demonstrates the power of science against COVID. We must see the final safety and efficacy data, but it is very encouraging.— Professor Chris Whitty (@CMO_England) November 9, 2020
It is essential we continue to suppress COVID, but it is a reason for optimism for 2021.
Richard Hunter, Head of Markets at interactive investor, said: “The Pfizer announcement is not yet a panacea, but adds to investor sentiment which had already been buoyed by the Biden victory, and has sent markets to strongly positive levels.
"Beneficiaries of the rally are widespread, particularly among the more beaten-down sectors. The airlines and airline-related stocks are on a tear, rising in some cases by over 25 per cent, while house builders, banks and retailers are all in the boat currently being lifted by a rising tide.
"On the flip side, interestingly, some of the stocks which have seen the benefit of lockdown and could therefore have this rug pulled from underneath them in the event of a return to normality, have seen a slight markdown.
"The likes of Just Eat, Kingfisher and Flutter Entertainment have all seen declines in anticipation of slowing sales should the widespread easing of lockdowns come into play.
"It is still early days, and the practicalities point to any meaningful distribution not being available until the first few months of next year. Even so, the news is without question a positive development and has certainly captured the imagination of investors.”
Covid-19 vaccine hopes have sparked a surge in the global stock market; FTSE 100 +5.34%, CAC 40 +8.17%, DAX +6.21% https://t.co/DYRV7zFty8— Paul Spann (@iamspann) November 9, 2020
The developers of the vaccine, Pfizer and BioNTech, plan to apply for emergency approval so the drug can start to be used by the end of the month after no safety issues were raised.
It has been tested on 43,500 people in the US, Germany, Brazil, Argentina, South Africa and Turkey.
Pfizer hope to supply 50 million doses by the end of 2020 and around 1.3 billion by the end of 2021.
The vaccine would include two doses given three weeks apart, and 90 per cent of individuals are then protected seven days after the second dose.
“Today is a great day for science and humanity. The first set of results from our Phase 3 COVID-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent COVID-19,” said Dr. Albert Bourla, Pfizer Chairman and CEO.