LONDON, Dec 30 — Europe’s stock markets mostly rose today after Britain became the first nation to approve a cheap coronavirus vaccine developed by UK pharmaceuticals giant AstraZeneca and Oxford University, eclipsing news of mounting infections and fears of tighter restrictions.
The Astra jab—which will be rolled out in Britain from January 4 — can be stored, transported and handled at normal refrigerated conditions.
It is therefore cheaper and easier to administer than the rival Pfizer/BioNTech and Moderna vaccines which require freezing, and has sparked renewed hope of a return to normality in 2021.
Around midday, London stocks gained 0.2 per cent with sentiment also lifted after European Union leaders signed their post-Brexit trade deal with Britain—with just one day to until the UK finally leaves the bloc.
In the eurozone, Paris stocks edged up 0.1 per cent while Frankfurt flatlined after this week’s record-breaking run as Germany mulled extending its virus lockdown in the face of rising cases and deaths.
Asia was also mostly firmer with vaccine and economic recovery optimism helping investors look past an alarming surge in Covid-19 cases around the world.
Worst behind us?
“Today’s vaccine news is helping European stocks,” AvaTrade analyst Naeem Aslam told AFP.
“It will not be a stretch ... to say that the worst may be behind us and things are likely to improve going in 2021.”
London’s FTSE 100 benchmark index surged 1.6 per cent on Tuesday, its first trading day since Prime Minister Boris Johnson unveiled the long-awaited Brexit agreement late on Christmas Eve.
“We expect global economic recovery to shift into a higher gear in 2021 and that means more gains for European markets,” added Aslam.
“In addition to this, the Brexit trade deal is highly likely to provide massive tailwind for UK and European stocks.”
In foreign exchange activity, the US dollar languished around 2.5-year lows versus the euro and pound, as investor appetite grew for riskier assets like equities.
Bitcoin, the world’s most popular cyber currency, extended his month’s blistering run to strike another record high at US$28,572.10 (RM115,346).
Pharma propels stocks
Back in London, today’s announcement sent AstraZeneca shares racing 0.9 per cent higher to 7,530 pence.
However, the stock remains about 1.0 per cent down over the course of this year despite development of the group’s landmark vaccine.
Drugs rival GlaxoSmithKline shares rose by 0.5 per cent but has shed almost a quarter in value since the start of 2020.
“The pharmaceuticals and biotech sector is down nearly 10 per cent for the year,” AJ Bell investment director Russ Mould told AFP.
“This seems like rank ingratitude given the importance of the vaccines upon which they are working, with the AstraZeneca-University of Oxford product due for roll-out any day now—and GlaxoSmithKline hopeful of launching a product in late 2021.
“Yet through their very success, the drug firms are helping to promote the share prices of others—companies which will benefit much more dramatically from any success in the effort to contain and beat back the virus and permit any degree of return to economic normality.”
The UK government has ordered 100 million doses of the Astra jab, with 40 million scheduled to be available by the end of March.
Britain approved a shot produced by Pfizer-BioNTech on December 2, and has already vaccinated around 800,000 people with the first dose.
The upbeat Astra news comes as a mutated strain of the disease—which spreads more quickly but is no more deadly—has been detected in several countries. That has put severe pressure on governments to impose stricter containment measures.
Wall Street had dipped Tuesday on disappointment that Republicans had blocked a move to ramp up stimulus cash handouts, though US lawmakers will likely push ahead with more support measures after Joe Biden takes over at the White House. — AFP