S&P 500 and Dow Jones hit record highs on renewed vaccine hopes

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Wall Street surged ahead today as news of the first successful late stage Covid-19 vaccine trials bolstered hopes of the global economy emerging from a year of pandemic-driven crisis, with the S&P 500 and Dow Jones opening on record highs.

News that Pfizer’s experimental vaccine was found to be more than 90 per cent effective in preventing Covid-19 in an initial study sent markets soaring on Monday. Equities also benefited from a bounce after Joe Biden triumphed in the tightly-fought US presidential election on Saturday.

Read more: Pfizer vaccine: ‘A good news day’ for markets, say analysts

Wall Street hits record highs on open

The benchmark S&P 500 rose 3.54 per cent in the first few minutes of trading, while the Dow Jones added 5.21 per cent. Pre-market trading showed that both indices were set to open on record highs. 

The tech-heavy Nasdaq rose 0.93 per cent, as shares in tech and other companies seen as “stay-at-home” winners either fell or rose slower.

In London, the FTSE 100 surged ahead on renewed hopes of a vaccine, with the blue-chip index climbing 5.53 per cent to 6,236.93. The midcap FTSE 250 climbed 5.43 per cent to 18,890.32.

Read more: Winners and losers: Stocks soaring AND plummeting as Pfizer reports Covid-19 vaccine breakthrough

Pfizer and German partner Biontech are the first drugmakers to show successful data from a large-scale clinical trial of a coronavirus vaccine, a major victory in the fight against Covid-19, which has killed over one million people globally.

The companies said they have so far found no serious safety concerns and expect to seek US emergency use authorisation for the drug later this month.

Global stocks had already hit a record high on Monday before news of the vaccine broke, as Biden’s victory helped equities extend last week’s gains. 

Before the Open newsletter: Start your day with the City View podcast and key market data

MSCI’s All-Country World Index surpassed an intra-day high set on 3 September this morning after rising 0.5 per cent. 

European shares surge on vaccine optimism

European shares surged following the positive news on the hunt for a vaccine. The pan-European Stoxx 600 soared 4.25 per cent, putting it on course for its best day in six months.

In Germany, the Dax rose over six per cent, with Biontech’s shares jumping more than 27 per cent. France’s CAC 40 climbed as much as 7.89 per cent.

In London travel and leisure stocks, which have been the hardest hit by the pandemic, were among the best performing sectors, while those that have broadly benefitted from lockdown measures fell. 

Read more: Airline stocks soar on Pfizer Covid-19 vaccine breakthrough

British Airways owner IAG surged over 31 per cent following the vaccine update from Pfizer, while hotels groups Intercontinental and Whitbread climbed 13.80 per cent and 17.87 per cent respectively.

Taylor Wimpey surged 17.72 per cent after the blue-chip housebuilder said it was on track to deliver annual results above market expectations.

Fellow housebuilder Baratt also rose following Taylor Wimpey’s update, climbing 10.42 per cent.

“The Pfizer announcement is not yet a panacea, but adds to investor sentiment which had already been buoyed by the Biden victory, and has sent markets to strongly positive levels,” said Richard Hunter, head of markets at Interactive Investor. 

Read more: Covid: Downing Street ‘optimistic’ about Pfizer vaccine breakthrough

“Beneficiaries of the rally are widespread, particularly among the more beaten down sectors,” he continued. 

“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.”

Britain said on Monday it was open to a “sensible” compromise on fishing and that there was goodwill on both sides to progress towards a Brexit trade deal as a new round of talks began in London.

Read more: Joe Biden ‘will not prioritise’ UK-US trade deal

Asian stocks posted strong gains overnight, with Japanese blue chips climbing to a 29-year high. The Nikkei 225 rose 2.12 per cent, reaching its highest level since 1991. 

In Hong Kong, the Hang Seng rose just under one per cent, while the Shanghai Composite gained 1.86 per cent.

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