Global financial markets soared on Monday, November 9, as news of a successful coronavirus vaccine trial and Joe Biden’s United States election victory bolstered investor confidence, sending New York to record highs.
Already up strongly on Biden’s victory, markets massively accelerated gains after Pfizer and its German partner BioNTech said a Phase 3 trial showed that their vaccine was 90% effective in preventing COVID-19 infections.
“Pfizer’s COVID-19 vaccine news has acted like a shot of adrenaline for the markets, triggering one of the biggest single day movements in global equities for a long time,” said Russ Mould, investment director at AJ Bell.
“A successful vaccine has greater significance than Joe Biden winning the US election as it would effectively pave the way to restarting economic growth globally.”
In New York, the early surge lost momentum later in the session, and the benchmark Dow Jones Industrial Average ended with a gain of just under 3%, pulling back from record territory.
Pfizer shares jumped 7.7% as analysts hailed the vaccine news as a breakthrough after months of mounting cases and deaths, especially in the US and Europe.
Jack Ablin of Cresset wealth advisors said the message of vaccine progress was “We’ve overcome the health crisis and now we have a much clearer path to recovery.”
Industries beaten down by the pandemic celebrated, including travel shares like cruise companies.
Conversely some of the companies which have benefited massively as suppliers of goods and services sought by virus lockdown citizens around the world fell back.
Videoconference service Zoom, that millions of people have relied on for work and social interactions, plunged more than 17%, while Netflix fell 8.8% and Amazon dropped 5%.
“Those companies, any airlines or cruise ships, were losing so much cash, we were concerned that they may not survive,” Ablin told Agence France-Presse.
“Now that we have a better sense of the schedule, it’s an all clear signal for investors to delve back into these cyclical and vulnerable names.”
Oil prices were also up sharply, with US benchmark West Texas Intermediate crude jumping 7.3% and Brent North Sea oil up 6.7%.
“The energy market is very sensitive to the perception of the health of the economy, so the progress being made with respect to a possible vaccine has sparked a huge wave of demand for oil,” said market analyst David Madden at CMC Markets UK.
Stock markets began rallying early on Monday as Biden’s election win was taken to mean less uncertainty and providing hope that the United States would finally agree on a stimulus package to prop up the ailing economy.
While Democrat Biden has secured enough votes for victory, his Republican rival Donald Trump has refused to accept defeat, with legal challenges and recounts looming.
In Asia, Tokyo’s main stocks index closed up more than 2% to end at a 29-year high before the seismic Pfizer announcement.
Key figures around 10:30 pm GMT
- New York – Dow: UP 2.95% at 29,157.97 points (close)
- New York – S&P 500: UP 1.1% at 3,550.5 (close)
- New York – Nasdaq: DOWN 0.7% at 11,713.78 (close)
- London – FTSE 100: UP 4.7% at 6,186.29 (close)
- Frankfurt – DAX 30: UP 4.9% at 13,095.97 (close)
- Paris – CAC 40: UP 7.6% at 5,336.32 (close)
- EURO STOXX 50: UP 6.4% at 3,407.91
- West Texas Intermediate: UP 7.3% at $39.84 per barrel
- Brent North Sea crude: UP 6.5% at $42.02 per barrel
- Euro/dollar: DOWN at $1.1814 from $1.1872 at 10:15 pm GMT
- Dollar/yen: DOWN at 105.31 yen from 103.33 yen
- Pound/dollar: DOWN at $1.316 from $1.3156
- Tokyo – Nikkei 225: UP 2.1% to 24,839.84 (close)
- Hong Kong – Hang Seng: UP 1.2% to 26,016.17 (close)
- Shanghai – Composite: UP 1.9% to 3,373.73 (close)