THE FTSE 100 has jumped by 5.5% following the news from Pfizer that a Covid-19 vaccine trial has exceeded expectations.
The surge has added £84billion to shares in the market’s best day since March.
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The American pharmaceutical giant Pfizer says interim findings from its large-scale clinical trial was more than 90% effective in preventing the disease.
Drugmakers are now expected to seek US emergency use authorisation later this month in a major victory in the fight against Covid-19.
The FTSE 100 was already up over the weekend following Joe Binden’s victory in the US Presidential Election.
British Airways owner IAG and engine maker Rolls-Royce, companies that have both been hard hit by the Covid-19 pandemic, jumped on hope that the vaccine could return the economy 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%, Just Eat Takeaway.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, was trading flat on a day when most companies were buoyant.
European stock markets have also reacted positively to the breakthrough.
Frankfurt’s markets shot up by 6%, while Paris soared by 7.1%. In Milan, the markets rose by 6.2% and 9.4% in Madrid.
The Dow Jones in the US was up by 5.4% ahead of the Wall Street open.
“Stock markets surged on some extremely positive news from Pfizer and Biontech,” said Neil Wilson, chief market analyst at Markets.com.
“The Dow is now seen up 1,300 points (at the official open). Coming on top of the wave of relief from Joe Biden’s victory, it’s proving a spicy cocktail for stocks.”
The UK has 10million doses of the Pfizer vaccine that could be rolled out by Christmas, once it is approved by regulators.
More to follow…
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