Markets surge on hopes for Covid-19 vaccine
Companies related to travel and tourism climb in Dublin
As hopes grew that travel and tourism may recover in time for next summer, Ryanair rose 14% in Dublin
Global stocks soared on Monday following news that a Covid-19 vaccine being developed by Pfizer and Germany’s BioNTech has been found to be more than 90 per cent effective, a major breakthrough that could make the shot available for use by the end of the year.
Euronext Dublin finished the day up 2.6 per cent as stocks tied to the discovery of the vaccine soared.
“The theme of the day was the vaccine,” said one trader. “Anything that was levered into a vaccine performed very well, while those stocks that were big performers throughout the pandemic and lockdown suffered.”
As hopes grew that travel and tourism may recover in time for next summer, EasyJet climbed 36 per cent; Ryanair rose 14 per cent; while Aer Lingus parent International Airlines Group finished the day up 25 per cent.
There was also good news for Irish Ferries parent Irish Continental Group which was up 14.9 per cent at close of business.
Dalata, the biggest hotel operator in the State, ended the day up 30 per cent.
The bounce also extended to the banks where AIB was up 15.8 per cent, Bank of Ireland was up 15.4 per cent, and PTSB was up 6 per cent.
Elsewhere, Kerry Group ended the day up 4 per cent, while DCC climbed 6.7 per cent.
Construction companies which were not overly dependent on a vaccine fared worse, with Kingspan down 1.9 per cent, while CRH ended the day up 75 basis points.
Gambling company and Paddy Power Betfair owner Flutter Entertainment was down 3.3 per cent.
London’s markets hit their best day since March as the news of a potential vaccine breakthrough and results from the US presidential race lit a fire under traders.
The FTSE 100 rose by 4.67 per cent, adding about £70 billion, after Pfizer said that it had seen positive signs from a vaccine trial.
British Airways owner IAG and engine-maker Rolls-Royce, companies that have both been hard hit by the Covid-19 pandemic, jumped on hope that the vaccine could return the economy closer to normal.
On the FTSE 250, Cineworld rose by 40 per cent, and Trainline added 31 per cent. EasyJet, TUI and cruise operator Carnival all rose by more than 20 per cent.
Ocado, which has seen sales soar because of lockdown, dropped 11.5 per cent, Just Eat Takeaway.com lost more than 8 per cent, and Reckitt Benckiser, which makes Dettol, fell 5.7 per cent.
European shares jumped to an eight-month high, with the pan-European Stoxx 600 up nearly 4 per cent, clocking its best day since late March.
Travel and leisure stocks, which have been the hardest hit by the pandemic, were among the best performing sectors, adding 7 per cent to hit an eight-month high.
BioNTech’s shares jumped more than 15 per cent, while Germany’s main stock index added 5 per cent. The index was also boosted by positive trade data for September.
Other core euro zone bond yields jumped, while peripheral yields surged off new record lows to trade higher.
The Dow Jones Industrial Average was on track for an all-time high, while the Russell 2000 Index of small caps jumped about 6 per cent.
Shares that have been hit hard by the economic toll of lockdowns such as travel stocks and movie theatres soared, with Carnival and Cinemark Holdings surging more than 35 per cent.
Boeing jumped 13 per cent, while airlines and cruise line operators were trading between 13 per cent and 30 per cent higher.
Stay-at-home companies Zoom Video Communications and Peloton Interactive sank at least 14 per cent on hopes that a return to normal is on the horizon. Online giant Amazon.com slid, while Netflix fell 4.4 per cent. (Additional reporting: Agencies)