Pfizer vaccine: ‘A good news day’ for markets, say analysts
Global stock markets catapulted this afternoon on news that Pfizer’s coronavirus vaccine saw a 90 per cent success rate in clinical trials, as analysts welcomed the announcement as a “boost for hopes of a return to normality”.
The prospect of a vaccine electrified world markets, with S&P 500 futures hitting a record high and tourism and travel shares soaring on hopes of a return to service.
London’s FTSE 100 jumped as much as 5.4 per cent to 6,225, while the FTSE 250 and FTSE All-share both notched gains above five per cent.
Shares in Easyjet jumped 30 per cent to 692.4p following the news, while British Airways owner IAG’s share price was up 38.75 per cent at 143.75p and Ryanair’s stock rose 16.16 per cent to 15.49 per cent.
“It’s proving a spicy cocktail for stocks… coming on top of Joe Biden’s victory”, said Neil Wilson, chief market analyst at Markets.com.
“All I can say is this is a good news day. Whilst we are not there yet, news that this vaccine could be highly effective is the best thing markets could hope for. Public health officials will remind us there is a long road ahead, and many challenges will be faced along the way, but there is an enormous sense of optimism today — light at the end of the tunnel.”
It comes after Albert Bourla, chairman and chief executive of Pfizer, said: “Today is a great day for science and humanity”.
“We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen,” he added.
Pfizer shares were indicated 12.5 per cent higher in pre-market trading in New York, while BioNTech’s US stock leapt 21 per cent.
“Let’s just hope the vaccine deniers won’t get in the way, but 2021 just got a lot brighter,” said Wilson.
The gains followed record rallies for shares around the world this morning as markets opened for the first time since Biden claimed victory over Donald Trump in the race to the White House.
The flip from red to blue was greeted by market analysts as “an end to four years of predictability”, after a tumultuous Trump presidency culminated in nationwide Black Lives Matter protests and the highest coronavirus death toll in the world.
Global stocks rose to a record high this morning as investor optimism over Biden’s victory helped equities extend last week’s gains.
MSCI’s All-Country World Index rose as much as 0.5 per cent, surpassing an intra-day high set on 3 September.
Seema Shah, chief strategist at Principal Global Investors, said: “The clearing of the election fog has permitted underlying market fundamentals to come back into focus, resulting in a strong push upwards.”
“[Meanwhile] the most recent vaccine news suggests a ‘return to normality’ should be coming sooner rather than later,” she added.
“Don’t forget too, that the election outcome is arguably the most favourable scenario for investors… All the chips are starting to line up, and market sentiment may be in the early stages of a burst of positive energy.”
But while Pfizer’s announcement proved good news for stocks that have suffered during the pandemic, it had the opposite effect on those that have fared well throughout the coronavirus crisis.
Shares in video-conferencing software firm Zoom sank in Wall Street pre-trading on investor concerns that a vaccine could spell the end to working from home.
Zoom shares closed around $500 per share on Friday, but crashed 12 per cent to $460 is Monday pre-trading in New York.
Delivery giants Ocado and Just Eat saw shares slump 11.4 per cent and 7.5 per cent respectively, while shares in B&Q owner Kingfisher slid 6.7 per cent.
“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,” said Richard Hunter, head of markets at Interactive Investor.
“Beneficiaries of the rally are widespread, particularly among the more beaten down sectors… 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.”
He added: “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.”