THE FTSE 100 has edged higher this morning after Oxford University’s coronavirus vaccine was approved by regulators.
Shares climbed to 6,615, up 0.20%, after it was confirmed the jab will be rolled out to millions of Brits from Monday – although the rise is far from a leap.
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Markets reacted to the glimmer of hope as Health Secretary Matt Hancock said the vaccine will help Britain out of the pandemic by spring.
But it’s possible markets had already anticipated the vaccine news, stunting the rise this morning, after the FTSE closed yesterday at its highest finish since before lockdown in March.
The FTSE ended at 6,603 on December 29, in its first day of trading since the Brexit agreement was reached on Christmas Eve.
News that the Oxford University vaccine was expected to gain UK approval in the coming days had also been reported.
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.
By 9.00am, the FTSE had dropped slightly to 6,600, down 0.03%.
The footsie index tracks the performance of the UK’s 100 biggest companies.
Shares in AstraZeneca and the FTSE 250, which tracks medium-sized British companies, have also risen today.
AstraZeneca shares were up by 1.3% to reach 7,582, while the FTSE 250 was at 20,913, up 0.08%.
The FTSE had previously edged higher on November 23 after the AstraZeneca vaccine was first found to be 70% effective in clinical trials.
At the time, the London stock market went up by 0.59% to 6,388.86.
Markets also soared by 1.8% on November 16 after Moderna said that its vaccine was found to be 94.5% effective.
And the week before, the markets jumped 5.5% following the news from Pfizer that their Covid-19 vaccine trial worked better than expected.
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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.
But Chancellor Rishi Sunak has since said he believes 2021 will be a “new era” for Britain following the vaccine news.
Matt Hancock says UK has 100 million doses of Oxford Covid vaccine on order and rollout will start Monday
