Tech rally drives US shares higher as FTSE 100 continues to climb
US shares opened higher today as signs of a possible vaccine for Covid-19 raised investor hopes of a faster-than-expected recovery from the pandemic-induced economic crisis.
Wall Street’s main indices opened higher, with technology stocks recovered from heavy losses earlier in the week. The tech-heavy Nasdaq rose 1.27 per cent shortly after the open, while the Dow edged 0.3 per cent higher. The benchmark S&P 500 climbed 0.5 per cent.
Read more: Pfizer’s Covid-19 vaccine news set off a $2 trillion trading frenzy on markets
Meanwhile, The FTSE 100 extended its three-day rally spurred optimism over the hunt for a vaccine.
London’s blue-chip index was sitting 0.76 per cent higher at 6,344.55 by 3pm. The midcap FTSE 250 made stronger gains, climbing just over one per cent to 19,229.28.
The FTSE 100 is now on its eighth straight day of gains, and has rallied over six per cent this week.
After falling nearly five per cent in October, the index is up more than 13 per cent this month, outperforming its US and European peers as a slew of stimulus measures and positive vaccine data supported hopes of a quicker-than-expected economic recovery.
The index also logged its best two-day gains since March on Monday and Tuesday as the prospect of an effective Covid-19 vaccine and optimism about a Brexit trade deal with European Union electrified markets.
Blue-chip betting group Flutter Entertainment rose almost over four per cent after raising its annual earnings forecast.
BAE Systems rose 2.44 per cent after the defence company slightly lifted its profit forecast as orders exceeded expectations.
“This week’s news on a vaccine, while welcome, does not change the fact that France, Germany and the UK are still in the middle of partial economic lockdowns,” said Michael Hewson, chief market analyst at CMC Markets.
“However, for now markets appear content to ignore this and are focussing on the potential green pastures of a post pandemic world, with a workable vaccine,” he added.
European equities rose for a third straight session as vaccine optimism overshadowed concerns about the economic damage from a second wave of coronavirus infections across the continent.
The pan-continental Stoxx 600 rose 1.11 per cent as positive sentiment endured. Germany’s Dax rose 0.51 per cent, while France’s CAC 40 gained 0.49 per cent.
Meanwhile, yields on 10-year British government bonds hit their highest level since Covid-19 lockdown measures were first introduced in March, as as investors extended their bets on a global economic recovery spurred by hopes of an effective vaccine.
Benchmark 10-year gilt yields touched 0.428 per cent in early trading today – their highest level since 25 March and up about two basis points on the day.
The yield on 20-year gilts hit their highest level since March 20 at 0.969 per cent.
Asian shares broadly rose overnight as the positive vaccine news continued to lift investor sentiment despite surging infections.
Read more: British chemicals firm strikes $100m deal with Pfizer to produce Covid vaccine
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 per cent, while Japan’s Nikkei rose 1.78 per cent.
The Shanghai Composite slipped 0.53 per cent as profit-taking in healthcare shares and concerns about tighter regulation over big tech firms offset optimism about rebounding consumption and progress in developing a vaccine. Hong Kong’s Hang Seng also fell, shedding 0.4 per cent.