FTSE 100 climbs to highest point since early June as second Covid vaccine found to be effective

THE FTSE 100 has leapt today to its highest point since June after news a second coronavirus vaccine has been found to be 94% effective.

Shares leapt by 1.8% to 6,430.27 within minutes of the announcement, up from 6362.71 at around 10:45am.

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The FTSE 100 has leapt after news a second Covid-19 vaccine is more than 90% effective

Trials on more than 30,000 people found that only five given the jab by US maker Moderna developed the virus – none with severe symptoms.

It’s the second indication in a week that a successful vaccine against Covid-19 is close to being developed.

The markets hope that a vaccine will help things return to something close to normal in the short to medium term.

The footsie index tracks the performance of the UK’s 100 biggest companies.

The UK has already agreed deals for six different vaccine candidates and has access to 350 million doses to date, but none are from Moderna.

But the success rate of another vaccine is a positive indicator that more are yet to come, including the University of Oxford jab.

How the FTSE 100 falling affects your personal finances

FALLS in the stock market can affect your finances in a number of ways, here we explain how.

Pensions – If you save cash into a pension scheme where the provider invests your money, you’ll likely see the value of your pension drop when the FTSE 100 falls.

But keep in mind that with retirement savings, you’re investing for the long-term so the drop in value isn’t likely to be permanent.

Instead, you’ll see your retirement savings grow again once the stock market recovers.

Savings and mortgages – There is no direct link between the stock market and your mortgage or savings accounts.

But if panic on the stock market spreads to the wider economy, the Bank of England may cut interest rates. Interest rates are currently held at 0.1%.

This means your mortgage is likely to get cheaper, while savers will suffer from lower interest rates.

We’ve explained how the interest rate cut will affect your finances here.

Sterling – The value of the pound often rises if the FTSE 100 falls.

This is because many of the firms on the index earns a significant amount of cash in the US.

But again, exchange rates are also volatile and there are many factors that make them rise and fall.

Last Monday, the markets jumped 5.5% following the news from Pfizer that their Covid-19 vaccine trial worked better than expected.

The surged added £82billion to shares in the market’s best day since June, although it dipped slightly to 6,186.29 but still finished up by 4.67%.

The government has already secured 10million doses of the Pfizer vaccine, which could be rolled out by Christmas if given the green light from regulators.

Companies that have been hit hard by the pandemic, such as British Airways owner IAG and engine maker Rolls-Royce, jumped in the hope a vaccine could see the economy return closer to normal.

On the FTSE 250, Cineworld rose by 38%, Trainline added 33%, easyJet, Tui and cruise operator Carnival were up about 28%.

But businesses that have been cashing in from the crisis took a hit.

Ocado, which has seen sales soar because of lockdown, dropped 8.5%, JustEatTakeaway.com lost more than 5%, and Reckitt Benckiser, which makes Dettol, fell 5%.

Meanwhile AstraZeneca, a rival to Pfizer in the race for a vaccine, hardly budged at all.

On March 12, 2020, the markets crashed 10.9% in a day to finish at 5,237.00 points, in one of the worst days since Blank Monday in 1987.

Since then, the pandemic has continued to have an impact – in September the FTSE 100 crashed by 3.5% over fears the UK would go into a second lockdown.

More to follow…

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