Drugs company Pfizer’s own shares jumped by 9 percent after it revealed that a potential vaccine has been found to be 90 percent effective based on initial trial results. The FTSE 100 index went up by 5 percent as European stocks closed on Monday at an eight-month high due to vaccine hopes.
STOXX Europe 600 ended the day 4 percent higher at 380.99 which was its best day since early May.
Germany’s DAX index was also up by 5 percent at 13,095.97 while France’s CAC 40 rocketed up by 7 percent at 5,336.32.
Online brokers struggled to keep up with the high levels of demand to buy shares and funds on Monday following the vaccine trial results announcement.
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FTSE 100 Index surges and European stocks reach 8-month high amid Covid vaccine
3.54pm update: Vaccine optimism continues to drastically alter markets
The hope of a vaccine in the not too distant future is continuing to have a huge impact on the markets. While some companies and indexes have surged on the back of the news, others have faltered.
The Nasdaq has now dropped by more than two percent today. The tech-based index has benefited from providing solutions to lockdown life. But with hopes of an end in sight, investors are switching to put money into pre-pandemic companies likely to see a boom when life returns to normal.
2.55pm update: US stocks open mixed
US stocks have not been hit with the same Pfizer fever as their European counterparts and have opened mixed, with tech stocks in red.
1.50pm update: Expert says COVID-19 vaccine will be a game-change for the markets
Neil Wilson of Markets.com said: “First the relief, now for a wee dose of reality.
“Stock markets are looking a little more cautious after yesterday’s massive surge on news that Pfizer and Biontech have a vaccine that is 90 percent effective – investors will now show a tad more caution that the kneejerk rally is out of the way.
“Markets have a habit of overshooting on the way down, and on the way back up.
“Nevertheless, an effective vaccine changes the game for investors, at the very least in terms of relative valuations and the premium we are willing to pay for growth.
“We have a lot more clarity now than a week ago for two big reasons. Joe Biden is all but certain to become the next president of the United States.
“More importantly, a vaccine is coming. The worst fears – of enduring year after year of masks, of having semi-permanent lockdowns and restrictions on our liberties lasting for ever – should not come to pass.
“All we need now is a Brexit deal this week as the cherry on the cake.
“What we in Britain and Europe need more than anything is a confidence injection – and a working vaccine does that.”
COVID vaccine helps boost markets
11.30am update: Pound extends gains since September
The pound has extended its gains as a risk-on mood continues across global markets, hitting its highest level against the dollar since early September.
11am update: Stock markets rise amid news of a coronavirus vaccine
Stock markets and commodities continued to push higher on Tuesday, after the euphoria of a coronavirus vaccine had sent global equity indexes soaring to an all-time high and shaken bond yields higher.
Having surged 4 percent on Monday on the vaccine breakthrough from US and German drugmakers Pfizer and BioNTech there was little surprise that Europe saw the pace drop, though things were still moving forward.
Pan-European STOXX 600 was up another 0.5 percent taking November’s rally past 13 percent and there was another 2.7 percent rally in bank stocks as worries about mass loan defaults and even more negative interest rates continued to ease.
“We have some consolidation in markets but I don’t think surprising given the size of the moves yesterday,” said JP Morgan Asset Management’s Hugh Gimber.
“The news we had was clearly a big step forward… it’s a big piece of the jigsaw to getting the global economy back on its feet.”
10.20am update: EU markets extend gains
European markets have extended their gains after a shaky open, with France’s CAC and the FTSE 100 showing particular strength. Germany’s DAX is flat.
9.45am update: EU hits Amazon with antitrust charges
European competition commissioner Margrethe Vestager will announce competition proceedings against Amazon today over how the retail giant uses merchant data
A source told the Financial Times: “The case focuses on the online retailer’s dual role, both as a marketplace for third-party vendors and also as a competitor which sells its own goods, these people said.
“The charge sheet, which is part of a probe that started nearly two years ago, fleshes out concerns that Amazon may be abusing its role by using the data it gathers on merchants to compete against them.”
EU competition commissioner Margrethe Vestager
9.30am update: Expert says labour market figures in line with expectations
Samuel Tombs from Pantheon Macroeconomics said: “Accordingly, the payroll employee numbers probably will not fall materially further over the coming months.
“Meanwhile, positive news on a Covid-19 vaccine suggests that demand in the consumer services sector could recover to pre-Covid levels in the second half of 2021; this might persuade firms to maintain headcounts through the first half of next year, when they still might be operating at a loss.”
9am update: Chief executive of the Recruitment and Employment Confederation responds to latest labour market figures
Responding to the latest labour market figures from the ONS published this morning, Neil Carberry, Chief Executive of the Recruitment and Employment Confederation, said: “There are few surprises in today’s data, and we know that tackling rising unemployment will be a national priority over the next few months.
“But news in the past week – of progress on a vaccine and in the extension of support packages – should mean businesses have more confidence to retain people and bring on new staff than they had a couple of weeks ago.
“Nevertheless, we are in a tough spot with redundancies hitting a record a record 314,000 in the three months to September.
“The focus needs to be on measures that will help employers retain staff and create new jobs, starting with a sensible approach to tax.
“Reducing employers National Insurance contributions, the biggest tax on business, will help struggling businesses retain jobs while encouraging those which need extra capacity to hire more staff.
“We now have 50 days until the Brexit transition period ends.
“The restarting of negotiations is promising but every effort must be made now to secure a deal that ensures businesses can continue to trade, especially in services which makes up 80 percent of our economy.”
8.30am update: FTSE 100 rose as stocks open
London’s FTSE 100 rose on Tuesday after scaling a near three-month high in the previous session, although gains were capped on a slightly stronger pound, while a higher jobless rate stoked fears of a faltering economic recovery.
The blue-chip FTSE 100 index rose 0.6 percent. The domestically-focussed mid-cap FTSE 250 index added 0.5%, boosted by travel and leisure and aero stocks.
Official data showed layoffs in Britain hit a record high during the third quarter as the unemployment rate jumped to 4.8 percent, while surveys said consumer spending faded in October even as the re-introduction of lockdowns prompted a renewed stockpiling spree.
Shares in Premier Foods Plc jumped 3.9 percent after it raised its full-year trading profit outlook and said it expects higher demand for its brands due to the recent government restrictions on eating out.
7.45am update: More on UK job losses
More details are emerging on the UK job losses.
Around 33,000 people were dropped from payrolls at UK employers last month, as the pandemic continues to weigh on the economy.
It helped push the unemployment rate to 4.8%, up 0.9 percentage points on a year earlier, according to official estimates.
7.15am update: UK unemployment soars in ONS update
The number of UK workers on payrolls dropped slightly last month and has fallen by 782,000 between March and October due to the impact of the coronavirus pandemic, the Office for National Statistics (ONS) said.