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(Alliance News) - Stocks in London ended higher on Monday as the latest vaccine news from Pfizer and BioNTech created a jubilant risk-off mood among investors.
A vaccine jointly developed by Pfizer and BioNTech was 90% effective in preventing Covid-19 infections in ongoing Phase 3 trials, the companies announced Monday.
Protection in patients was achieved seven days after the second of two doses, and 28 days after the first, according to preliminary findings.
"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," Pfizer Chair & Chief Executive Albert Bourla said in a statement.
Across much of the globe, Covid-19 infections rates are soaring to record highs, with hospital intensive care units filling up and death tolls mounting as well.
Based on supply projections, the companies said they expect to supply up to 50 million vaccine doses globally in 2020, and up to 1.3 billion doses in 2021.
The FTSE 100 index closed 4.7%, or 276.27 points higher at 6,186.29. The FTSE 250 ended 5.2%, or 932.53 points higher, at 18,850.36, and the AIM All-Share closed up 0.2%, or 1.68 points, at 984.40.
The Cboe UK 100 index closed up 5.0% at 616.36. The Cboe 250 ended 6.3% higher at 16,075.41. The Cboe Small Companies rose 5.6% to 10,214.32.
Shore Capital research analysts Adam Barker and Tara Raveendran said: "Covid-19 has caused death and harm to millions and the world's actions to combat it have led to untold economic damage. But if Pfizer/BioNTech's vaccine is what it appears at first glance, alongside the other vaccines that could potentially be approved, today could arguably be the 'end of the beginning' in our view.
"Although the next steps may be difficult and take time, an effective vaccine is a major weapon in the fight against the virus and it would certainly signal an end of the first phase in our effort to control it."
Stocks in New York were well in the green at the London equities close. The DJIA was up 3.8%, the S&P 500 index was 2.8% higher and the Nasdaq Composite was up 1.1%.
In Paris the CAC 40 ended up 7.2%, while the DAX 30 in Frankfurt ended 5.0% higher.
Chris Beauchamp, chief market Analyst at IG, said: "Stock markets have built on last week's huge rally with a tub-thumping bounce today following news that Pfizer's Covid vaccine was proving to be highly effective. The news broke ahead of the US open, and has resulted in one of the biggest up days for stocks in recent memory, putting the S&P 500 in new record high territory and pushing the Dow 1000 points higher in the first hour."
The pound was quoted at USD1.3131 at the London equities close, down from USD1.3172 at the same time on Friday.
The euro stood at USD1.1815 at the European equities close, down from USD1.1887 a day before.
Against the yen, the dollar was trading at JPY105.57, up from JPY103.33 late Friday.
Brent oil was quoted at USD42.46 a barrel at the equities close, up from USD39.66 at the same time on Friday.
Gold, on the other hand, was lower as traders moved away from safe haven assets. An ounce of the precious metal was quoted at USD1,853.81 an ounce at the London equities close against USD1,952.40 on Friday.
China declined Monday to congratulate Joe Biden as the winner of the US presidential election, saying the outcome of the vote was still to be determined.
In addition, Russian President Vladimir Putin is waiting for official results from the US presidential election before congratulating a winner, the Kremlin said.
While incumbent Donald Trump has yet to concede and has launched several legal challenges, many world leaders congratulated Biden and running mate Kamala Harris after the Democrats were declared winners at the weekend and spontaneous celebrations erupted across American cities.
Trump's four years in the White House have been marked by a costly trade war and increasingly icy relations with China, with the two powers sparring over areas from blame for the Covid-19 pandemic to Beijing's human rights record in Xinjiang and Hong Kong.
China – among a handful of major countries including Russia and Mexico that has not congratulated the president-elect – said Monday it had "noticed that Biden declared he is the winner of the election".
"Our understanding is that the outcome of the election will be determined in accordance with US laws and procedures," foreign ministry spokesman Wang Wenbin told press at a regular briefing.
Pressed by reporters, Wang said: "We hope the new US government can meet China halfway."
On the London Stock Exchange, Taylor Wimpey finished 19% higher after said it is on track to deliver full-year results towards the top end of expectations, supported by positive conditions in the UK housing market.
Taylor Wimpey said the UK housing market has recovered well since the second quarter lockdown and underlying demand continues to be "resilient". The housebuilder said its sales rate was 0.76 homes per outlet per week in the second half so far, versus 0.93 a year ago.
The housebuilder noted that customers have benefited from the short-term extension to the current phase of the UK government's Help to Buy scheme and the Stamp Duty Land Tax holiday. Its total order book, excluding joint ventures, represents 11,530 homes as at the start of November.
The order book stands at GBP3.0 billion, up 11% on GBP2.7 billion a year ago.
Turning to England's new lockdown, Taylor Wimpey said the UK government has confirmed the housing market should remain open for business.
Bunzl ended 3.6% lower after news it has signed an agreement to purchase SP Equipamentos, a personal protection equipment distributor based in Sao Paulo, Brazil.
SP Equipamentos, which supplies safety products to customers across a number of markets including the mining, steel, construction and agriculture sectors, generated revenue of BRL143 million - around GBP20.2 million - in 2019, Bunzl said.
The FTSE 100-listed distribution and services firm added it has now completed the acquisition of protective gear products provider ICM. The acquisition of the Denmark-based company was first announced in February. In 2019, ICM generated revenue of DKK410 million, around GBP49.6 million.
The economic calendar for Tuesday has UK employment and average earnings at 0700 GMT. Elsewhere, French unemployment is expected at 0630 GMT, followed by industrial output at 0745 GMT. The US has the labour turnover survey print at 1500 GMT.
The UK corporate calendar has half-year results from blue-chip support services firm DCC and commercial property developer Land Securities Group, as well as third quarter results from housebuilder Persimmon. Meggitt also reports a trading statement.
In the FTSE 250, half-year results are due from research and industry tools, products, and systems maker Oxford Instruments, industrial and electronics products distributor Electrocomponents and food maker Premier Foods, while Direct Line Insurance Group reports third quarter results.
By Anna Farley; annafarley@alliancenews.com
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