Global markets have rallied this afternoon on hopes of a breakthrough in the hunt for a coronavirus vaccine.
The FTSE 100 is up 4.2 per cent since midday, when developers Pfizer and BioNTech announced that preliminary analysis showed their vaccine was 90 per cent effective in their latest round of trials.
The companies, which plan to apply for emergency approval to use the vaccine by the end of the month, said it was a “great day for science and humanity”.
Businesses thwarted by the global pandemic — such as International Consolidated Airlines (BA’s parent company), catering company Compass Group, and financials such as Lloyds and Prudential — drove the UK’s blue chip index skyward.
Such firms’ individual share prices rose by as much as 37 per cent this afternoon.
Industries which have prospered amid the coronavirus crisis, including online food delivery service Ocado and takeaway service Just Eat, have gone the other way, falling 15 and 9 per cent respectively.
Other markets in Europe have made similar gains. The Euro Stoxx 50 is up nearly 7 per cent since the announcement while Germany’s DAX is up 6 per cent.
Over the pond, the S&P 500 — already buoyed from the close of the US presidential election — jumped 3 per cent to an all-time high on opening, though it was cyclical stocks that led the way today as opposed to tech companies.
Paul Craig, portfolio manager at Quilter Investors, said: “The fact that the world was hit with an unknown virus and within a year has produced what looks to be an effective vaccine is remarkable.
“This announcement is hugely positive news and is the first major step back towards normality for those worst-affected by Covid-19.”
However, Mr Craig warned the vaccine was not a “silver bullet” and noted many of the issues facing developed economies were now “structural”.
Richard Hunter, head of markets at Interactive Investor, said the beneficiaries of today’s rally were “widespread”, particularly among the more beaten down sectors.
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.”
imogen.tew@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.
