Global stock markets leapt at lunchtime today, along with the Pfizer share price in afterhours trading, which is up by over 12% on the announcement the company’s Phase 3 Covid-19 vaccine trials have shown efficacy of up to 90%. That result, far higher than the necessary 50% needed for a vaccine to be approved by regulators and at the top end of the possible range, means there is hope first bulk deliveries of a vaccine could be made ‘within weeks’.
German biotech company BioNTech, which is listed on the Nasdaq stock exchange in the USA, and who developed the vaccine alongside Pfizer, has seen its share price soar by over 26% ahead of markets opening on Wall Street. Here in the UK, the FTSE 100 leapt over 5% as the news broke just before midday. The FTSE 250 was up by over 4%, to reach its highest level since March, moving slightly above its June high.
The mood of investors was even more bouyant on continental Europe, with Germany’s DAX 30 up almost 6% and France’s CAC 40 7.5%. Futures point to the Dow Jones opening up on Wall Street as much as 1000 points to the good.
Understandably, share prices in the travel, tourism and hospitality sectors have seen especially impressive rises. British Airways-owner IAG is up almost 40%, Easyjet is up just over 30% and Ryanair 12.5%. Jet engine-maker Rolls-Royce has seen its share price soar by almost 45%. Cineworld, the second largest cinema chain in the world, has gained 37%.
On the flipside, some of the stocks to benefit from lockdown restrictions this year have fallen to losses. Ocado, the online groceries delivery company and warehouse automation specialist, is down around 11.5%. Netflix, the television and film streaming service that saw subscriber numbers swell over the first lockdown, is down 5.5%. The gold price, a traditional safe-haven asset during times of economic strife, has slid 2%.
Stock markets were already in a good mood this morning after Joe Biden was confirmed as the president-elect of the USA over the weekend. The scenario of a less volatile leader than incumbent Trump, but with the Republican Party still controlling the Senate and probably blocking any moves to increase taxes over the medium term, has been approved by markets as a good one.
The fact that Phase 3 trials of the Pfizer/BioNTech vaccine have returned efficacy rates of 90% is why stock markets have reacted so positively. Regulators would probably have approved any safe vaccine with efficacy of over 50%. With the WHO saying no vaccine offers 100% protection, 90% is practically speaking the absolutely best result possible.
The UK had pre-ordered 20 million doses of the vaccine, in the hope that late stage trials would prove successful. 5 million of those vaccines are due to be delivered this year, with the NHS now being told to prepare for mass vaccination from early December.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.