Markets advance further beyond vaccine-induced surge

LONDON — Financial markets were less giddy on Tuesday, but substantial gains continued nonetheless for some stocks and oil prices on strong hopes for a coronavirus vaccine.

News from the US pharmaceutical group Pfizer and Germany's BioNTech about excellent phase-three results for their candidate vaccine "seems to have been a game changer, even if experts warn that production and distribution may take time," remarked Fawad Razaqzada, an analyst at ThinkMarkets.

AJ Bell investment director Russ Mould noted meanwhile that "the stock market is all about pricing in what people think might happen, not what's already happened," as share prices continued to rise.

Pfizer and BioNTech announced Monday that their vaccine candidate was 90 per cent effective in preventing COVID-19.

The scientific community reacted positively, with US expert Anthony Fauci describing the results as "extraordinary" and World Health Organisation boss Tedros Adhanom Ghebreyesus hailing the news as "encouraging".

But others pointed out that data from the ongoing trial still needed review, including the ages of the participants, and that distribution logistics could be challenging as well.

London's benchmark FTSE 100 index ended the day with a gain of 1.8 per cent, after closing almost five per cent higher on Monday.

Advances among individual shares were led by companies that have been hammered for most of the year by lockdowns, particularly airlines.

Top Asian indices, playing catch up with Pfizer's news, were mixed Tuesday, with Tokyo up by 0.3 per cent, Hong Kong gaining 1.1 per cent and Shanghai slipping by 0.4 per cent.

Singapore and Bangkok each soared by more than three per cent.

Leisure stocks and shopping centre groups bounded higher, while tech firms that have benefitted from people being kept at home retreated, as did medical equipment makers.

US vote

On Wall Street the Dow Jones index showed a gain of 0.6 per cent in midday trading as the country slowly emerged from its presidential election drama.

"The clearing of the election fog has permitted underlying market fundamentals to come back into focus and the most recent vaccine news suggests a 'return to normality' should be coming sooner rather than later," said Seema Shah of Principal Global Investors.

Joe Biden's apparent win provided a boost to investors looking for less chaos after four years of Donald Trump, and Republican success in holding on to the Senate could limit attempts by Democrats to push through big tax and regulatory changes.

The chances of a massive new US stimulus package seen to have receded, however.