LONDON MARKET: Stocks Surge As Pfizer Offers "Light At End Of Tunnel"

Mon, 09th Nov 2020 14:25

(Alliance News) - Stocks in London powered higher on Monday afternoon following hopeful news of a vaccine against Covid-19 sooner rather than later.

Having risen strongly on Democrat Joe Biden's US election win, markets massively accelerated gains after Pfizer and its German partner BioNTech said their vaccine was 90% effective in preventing Covid-19 infections.

Protection in patients was achieved seven days after the second of two doses, and 28 days after the first, according to preliminary findings. Based on supply projections, the two 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 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.

Pfizer shares were up 16% in pre-market trade in New York.

In London, the FTSE 100 index was up 334.22 points, or 5.4%, at 6,244.24. The FTSE 250 was up 924.58 points, or 5.2%, at 18,842.71. The AIM All-Share was flat at 983.40.

The Cboe UK 100 was up 5.8% at 620.08. The Cboe 250 up 5.8% at 15,996.22. The Cboe Small Companies was up 4.3% at 10,193.86.

The CAC 40 in Paris was up 7.2% and Frankfurt's DAX 30 was up 5.6%.

"The market, and indeed most people, have been waiting to see some light at the end of the tunnel and the beginning of the end of the pandemic. The announcement from Pfizer has done just that, giving markets an injection of hope that businesses can soon return to normal. The news has boosted markets, which were already buoyant on the back of Biden's election as US president," said Adrian Lowcock, head of personal investing at Willis Owen.

In the FTSE 100, travel stocks were higher, having taken a severe battering since the onset of the coronavirus crisis, as global travel was brought to a standstill.

British Airways parent International Consolidated Airlines up 32%, while jet engine maker Rolls-Royce Holdings was best performer, up 45%.

Midcap carrier easyJet was up 40% and cruise line operator Carnival was up 34%.

"Travel stocks like IAG 30% and EasyJet 26% are among the best risers on the UK market, whilst Rolls-Royce led the charge. Cineworld 47% and Carnival 31% also indicative of a major rotation back into these stocks that have been hardest hit by the pandemic," said Markets.com analyst Neil Wilson.

At the other end of the index of London large-caps, companies that benefited from tighter coronavirus restrictions were in the red, with online grocer Ocado the worst performer, down 14%, and online takeout platform Just Eat Takeaway down 10%.

In the FTSE 250, leisure stocks were in bright green, with travel food outlet operator SSP Group up 40% and cinema chain Cineworld up 38%.

The Dow Jones Industrial Average was called up 5.5%, the S&P 500 up 4.4% and the Nasdaq Composite up 0.8%. Futures for the tech-heavy index were only marginally higher, as many tech stocks have benefited from stay-at-home orders.

Zoom Video Communications and Netflix were down 14% and down 5.9% in the US pre-market.

The safe-haven dollar was down against counterparts amid a risk-on mood from the vaccine news and Biden's victory.

The pound was quoted at USD1.3196 on Monday afternoon, up from USD1.3172 at the London equities close Friday.

The euro was priced a USD1.1910, up from USD1.1887. Against the yen, the dollar was quoted at JPY104.92, up from JPY103.71.

Gold was quoted at USD1,856.72 an ounce on Monday afternoon, down sharply from USD1,952.40 late Friday, as demand for the safe-haven asset waned.

Brent oil was trading at USD43.16 a barrel on Monday afternoon, up sharply from USD39.66 on Friday evening, having hovered around the USD40 mark before the Pfizer news broke.

"Oil has had an absolutely horrific year with the pandemic hammering demand and, at one point, pushing crude prices negative. Well, that may now change with a vaccine providing a sustainable solution to an utterly horrific problem that has caused carnage across the globe," commented Oanda analyst Craig Erlam.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com