Second vaccine delivers shot in arm for markets
THE FTSE 100 started the week with a bang after another Covid vaccine announcement gave shares a shot in the arm.
Stock markets across the world rallied after US company Moderna said its potential coronavirus vaccine was nearly 95pc effective.
On the London Stock Exchange many of the companies hit hardest by Covid restrictions including British Airways-owner IAG, Rolls-Royce and Cineworld were among the biggest risers.
Moderna plans to apply for regulatory approval in the next few weeks and, although it is still using early data, said it was a ‘great day’.
Moderna’s update came a week after Pfizer said its vaccine had been found to be 90pc effective, raising hopes the world is edging closer to returning to normal.
The FTSE 100 rose 1.7pc, or 104.9 points, to 6421.29, bringing its total gain since Friday, November 6 – before either vaccine update – to almost 9pc. The rise in London was echoed across other major markets, with Paris’s Cac 40 rising 2pc, Germany’s Dax closing 0.7pc higher and the Dow Jones rising 1.6pc on Wall Street.
Embattled engine maker RollsRoyce closed up 9.9pc, or 9.3p, at 103p, barrelling to the top of the Footsie leaderboard, as the promise of multiple vaccines made it more likely that global air travel will bounce back.
Rolls-Royce earns a large chunk of its money from the number of hours its engines on passenger aircraft fly.
Premier Inn- owner Whitbread (up 9.8pc, or 273p, to 3054p) and airlines group IAG (up 9.8pc, or 14.15p, to 158.75p) also climbed.
The mid-cap FTSE 250 jumped 1.8pc, or 338.05points, to 19608.05, as it too was bolstered by travel and leisure stocks. Cineworld shot up 13.5pc, or 5.92p, to 49.76p, while cruise operator Carnival rose 12.2pc, or 131.5p, to 1212.5p.
Train and airport cafe operator SSP, which runs Upper Crust outlets, was another winner, rising 11.8pc, or 39p, to 368.8p, while WH Smith, which has seen its turnover slump at its lucrative travel branches, finished up 9.7pc, or 131p, to 1484p.
Conferences group Informa managed to climb 2.2pc, or 12.4p, to 573.6p, despite being downgraded to ‘ hold’ by Berenberg brokers, who claimed a recovery in the business events industry had already been built into its share price.
Although companies in pandemic-hit sectors rallied throughout the main indexes, the small caps and AIM, many of the socalled ‘ lockdown winners’ had a far worse start to the week.
Grocery delivery giant Ocado, which has come into its own this year amid shopping restrictions, fell 4.1pc, or 94p, to 2189p, while takeaway firm Just Eat Takeaway tumbled 3.3pc, or 280p, to 8134p.
On AIM, stock market darling Novacyt, which developed one of the world’s first Covid tests back in January, shed 11.7pc of its value, falling 104.5p, to close at 792.5p.
Beyond the vaccine rally, investors’ attention turned to Royal Mail, following media reports that the Post Office is looking to end an agreement that dictates it can only handle Royal Mail letters and parcels. Terminating the arrangement would potentially enable the Post Office to process packages from Amazon and other big online retailers – which have thrived this year during lockdowns.
Shares in 504-year- old Royal Mail dropped 1.7pc, or 4.6p, to 270p last night.
Traders were less ruffled by the abrupt departure of contractor Capita’s finance boss.
The FTSE 250-listed outsourcer’s shares fell 0.3pc, or 0.1p, to 39.1p, after Patrick Butcher left after less than two years in the post. Capita said he was leaving to ‘pursue other opportunities’.