News of a 90% success rating in Pfizers late-stage covid-19 vaccine trials have prompted huge surges in stocks around the world, with the Dow Jones and S&P 500 reaching record highs.
Already boosted by confirmation of Joe Biden's victory in the presidential elections last week, the Dow Jones Industrial Average rose by more than 1,200 points in morning trading, and the S&P 500 was up by more than 3.2% at the time of writing.
US pharmaceutical giant Pfizer, which developed the vaccine with Germany's BioNTech, said it expects the first vaccines to be administered under emergency authorization by the end of the year.
Pfizer's covid-19 vaccine news has acted like a shot of adrenaline for the markets, triggering one of the biggest single day movements in global equities for a long time."
Albert Bourla, Pfizer's chairman and chief executive, said, "Today is a great day for science and humanity. 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."
Commenting on the development, analysts from Peel Hunt, an investment bank, cautioned that: "vaccines are likely to play a role in returning the global economy to a more normal footing, but it is unlikely that mass vaccination will be a silver bullet," noting that "recovery is more likely to be a function of sustained progress achieved through multiple complementary initiatives", and that "the path to normality may not be strictly linear."
Russ Mould, investment director at AJ Bell, said: "Pfizer's covid-19 vaccine news has acted like a shot of adrenaline for the markets, triggering one of the biggest single day movements in global equities for a long time. A successful vaccine has greater significance than Joe Biden winning the US election as it would effectively pave the way to restarting economic growth globally."
"That was evident by Brent crude oil prices jumping 9% to $43.36 per barrel. Oil prices are an economic bellwether and that massive increase in price is a perfect illustration of how markets are now adopting an extremely bullish view."
"Investors are taking this to be game-changing news judging by how they are bidding up shares in large parts of the market."
Mould pointed out: "In particular, all the stocks that were badly sold off this year are now among the biggest risers of the day as investors assume the vaccine will be deployed successfully and there is now a greater chance of earnings recovery in the short to medium term."