British investors rushed to buy beaten down shares today, as coronavirus vaccine news saw some big name companies jump by 40 per cent.
Global stock markets have shot up and the FTSE 100 rose 5 per cent after Pfizer and Biontech said that their Covid-19 vaccine is at least 90 per cent effective in preventing people from contracting the virus, marking a major breakthrough in the global race to stop the disease.
DIY investing platform giant Hargreaves Lansdown said it had its busiest day, leaving some customers struggling to get into accounts to trade as investors rushed to buy on the good vaccine news.
Aerospace engineer Rolls-Royce saw shares rocket 44 per cent, while airlines EasyJet and BA-owner IAG posted big gains, BP and Shell jumped and Cineworld stock leapt 40 per cent.
The chart shows the moment Pfizer vaccine news hit the wire, with the FTSE 100 jumping 5%
The FTSE 100 – which was already up around 1.5 per cent following the news of Joe Biden’s victory over the weekend – rallied 5 per cent when the vaccine news hit the wires.
The FTSE 100 UK blue-chip index ended the day 4.76 per cent, or 276 points higher at 6,186, while the FTSE 250 rose 5.2 per cent, or 932 points, to 18,850.
The pharma companies said that early results from a massive clinical trial suggest nine out of 10 people who get their jab are protected from coronavirus by it, and are expected to seek regulatory approval of the vaccine as early as this month.
This sparked a rush by British personal investors to buy companies that have seen their share prices hammered by Covid-19. That caused some DIY investing platforms to struggle with volume, as they reported record trading.
Danny Cox, of Britain’s biggest online broker Hargreaves Lansdown, said: ‘It was the busiest day for people logging into the website and app ever – a record day.
‘There was a huge market jump after the Pfizer announcement and election result. Other brokers have announced the same about issues because of the huge wall of people coming in. There is pent-up demand on people putting their money back into market
‘We are sorry for any inconvenience but all is ok now – if anyone feels genuinely disadvantaged then write to us.’
A spokesman for rival platform AJ Bell said: ‘It was one of our busiest ever days on the platform in terms of traffic to the website and the app. We did have some intermittent issues because it was so busy.
‘Some customers might not have immediate access as we would have hoped but we worked through all afternoon to resolve those issues.’
Interactive Investor also said that it had its busiest trading day in a year that has delivered a series of them.
A spokesperson said: ‘We are holding up to the challenge remarkably well. Our ten busiest days have all happened in 2020 and today was another record breaker.’
Shares in airlines, hotel and cinema chains and hospitality companies, which have been among the hardest hit by the pandemic, recorded the biggest gains.
British Airways parent company IAG shot up more than 40 per cent at one point on Monday on hopes that a possible vaccine will see travel demand bounce back. The stock slipped back and closed up 25 per cent to 130p, although it remains down around 78 per cent since the start of the year.
Similarly, shares in FTSE 250-listed Cineworld shot up 40 per cent to 40.42p, although they still are some 80 per cent below their value at the beginning of the year.
Budget airline easyJet, another airline whose share price was hammered by the pandemic, closed up 35 per cent. Engine maker Rolls-Royce soared 44 per cent.
The biggest riser on the FTSE 100 was catering group SSP, which ended the day up almost 52 per cent.
Other winners were hotels, with Intercontinental Hotel Group closing up 12 per cent and Premier Inn owner Whitbread rising 15 per cent.
Pubs and restaurants like Wetherspoon and Restaurant Group were among the other big gainers from the news, with shares closing up 20 per cent and 30 per cent respectively.
A vaccine should help the economy rebound faster, causing a rally in oil prices, which jumped by about 8 per cent to above $40 a barrel. As crude prices rose, oil majors BP and Shell also made gains, rising by around 15 per cent and 12 per cent respectively.
Banks were also higher, with Lloyds and Barclays up by 12 and 16 per cent respectively towards the close.
Despite the market rally, there were also some losers today.
Ocado and Just Eat Takeaway – two companies which have benefited from the pandemic, seeing a surge in demand for their groceries and takeaway meals – were among today’s top fallers.
Ocado shares tumbled 8 per cent, while Just Eat Takeaway shares fell 9 per cent. And even B&Q owner Kingfisher, another winner of the pandemic which spurred demand for DIY, closed down 8.5 per cent.
Stock markets in Europe were also boosted by the news, with Spain’s Ibex closing up more than 8 per cent, France’s CAC 40 jumping by 7 per cent, Germany’s DAX rising 5 per cent and Italy’s FTSE Mib also by around 5 per cent.
‘Whilst we are not there yet, news that this vaccine could be highly effective is the best thing markets could hope for,’ said Neil Wilson, an analyst for Markets.com.
‘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,’ he added.
Albert Bourla, Pfizer chairman and chief executive said today was ‘a great day for science and humanity’ after revealing that its experimental Covid-19 vaccine was more than 90% effective
Dr. Albert Bourla, Pfizer chairman and chief executive said today was ‘a great day for science and humanity’.
‘The first set of results from our Phase 3 Covid-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent Covid-19.
‘We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen.
‘With today’s news, we are a significant step closer to providing people around the world with a much-needed breakthrough to help bring an end to this global health crisis. We look forward to sharing additional efficacy and safety data generated from thousands of participants in the coming weeks.’