Promising data regarding a potential Covid-19 vaccine released by a US-German consortium gave a strong boost to leading stock markets across the world on Monday.
Shares in Germany’s BioNTech saw a 16-per-cent jump shortly after the announcement, while US pharmaceutical corporation Pfizer’s shares soared by 9 per cent, before closing 7.6 per cent higher.
The firms said that their vaccine candidate was 90-per-cent effective in preventing Covid-19 and that they planned to apply for emergency authorization by the United States’ FDA regulator next week.
US markets largely soared higher on the open, with positive news of the vaccine development helping to boost shares.
Monday was also the first chance for traders to react to the news that Democrat Joe Biden won the US presidential election winner.
Beyond Pfizer, some of the biggest winners were cruise lines, energy companies and real estate entities, as investors began to see an end to the pandemic.
Stay-at-home companies saw their stock prices slip and the tech-heavy Nasdaq, which has some of the stocks that have led the markets rally off their lows in March, retreated, down 1.5 per cent, as investors began a rotation to cyclical stocks set to benefit from a return to normal.
Netflix went down 8.5 per cent, while shares in Zoom, the video conferencing company that has skyrocketed this year, dropped 17 per cent. Microsoft and Apple were down 2.3 and 2 per cent, respectively.
The S&P 500 closed up 1.7 per cent, though it was off session highs. The Dow Jones Industrial Average jumped up 4.6 per cent in the morning, but closed at 2.95 per cent up. Small cap stocks rose strongly, in a broad rally.
Germany’s DAX index likewise powered ahead on Monday, rising 4.94 per cent on the day to close at 13,095.97.
The tensely awaited outcome of the US elections also helped boost the DAX, which was up by more than 6 per cent at one point, reaching heights not seen since mid-September.
News of Biden’s victory provided a firm start in Germany, where President Donald Trump has been deeply unpopular. Information released on the vaccine then added to the positive sentiment in Frankfurt.
Elsewhere in Europe, Paris’ main CAC 40 index ended the day at 5,336.32, up 5.94 per cent on its opening and up 7.57 per cent on the previous day’s close.
In London, the blue-chip FTSE 100 ended the day 4.67 per cent higher. Oil prices were also up, suggesting optimism that the economy – and transport – could gain traction.
Markets in the Asia Pacific region had closed before the US-German consortium’s announcement.
They had however recorded strong gains on the news that the US presidential elections had resulted in a victory for Biden over Trump.
Japan’s benchmark Nikkei 225 Stock Average on Monday closed up more than 2 per cent.
Gains were also recorded in Taiwan, Australia and South Korea, as well as China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index.