Global stocks have surged after drug companies Pfizer and BioNTech announced that their coronavirus vaccine was 90% effective in tests, giving hope that economies around the world can soon return to normal.
The FTSE 100 soared on Monday by 5.5% to 6,242 points, up 332 points, its highest since mid-August. Most of the increase happened immediately after the vaccine announcement was first reported just before midday in London.
On Wall Street, the benchmark S&P 500 index was on track to surge 3.9% when trading begins, according to stock market futures.
Many of the biggest stock market gainers on Monday were the companies most affected by restrictions on movement brought in to fight the pandemic.
On the FTSE 100 they included shares in events company Informa, which soared by 44%, British Airways owner International Airlines Group, which gained 39%, and jet engine manufacturer and maintenance company Rolls-Royce, which gained 33%.
Pfizer and BioNTech said the vaccine was “found to be more than 90% effective in preventing Covid-19 in participants without evidence of prior Sars-CoV-2 infection in the first interim efficacy analysis”.
Stock markets had already gained ground as investors digested the US election result. President-elect Joe Biden was projected to have a firm lead in the electoral college, despite the Democratic party’s apparent failure to win back control of the Senate.
Neil Wilson, the chief market analyst for Markets.com, said: “While we are not there yet, news that this vaccine could be highly effective is the best thing markets could hope for.
“Public health officials will remind us there is a long road ahead, and many challenges will be faced along the way, but there is an enormous sense of optimism today – light at the end of the tunnel. Let’s just hope the vaccine deniers won’t get in the way, but 2021 just got a lot brighter.”