LONDON MARKET CLOSE: Moderna Covid Vaccine Injects Life Into Markets

(Alliance News) - Stocks in London ended sharply higher on Monday as investors reacted positively ...

Alliance News 16 November, 2020 | 5:00PM
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(Alliance News) - Stocks in London ended sharply higher on Monday as investors reacted positively to more advancements in the ongoing fight against the coronavirus pandemic.

US biotech firm Moderna on Monday announced its experimental vaccine against Covid-19 was almost 95% effective, marking a second major breakthrough in the quest to end the pandemic.

Moderna released early results from a clinical trial with more than 30,000 participants, after American pharmaceutical company Pfizer and its German partner BioNTech last week said their vaccine was 90% effective.

Both frontrunners are based on new technology that uses synthetic versions of molecules called "messenger RNA" to hack into human cells, and effectively turn them into vaccine-making factories.

Moderna plans to submit applications for emergency approval in the US and around the world within weeks, and says it expects to have approximately 20 million doses ready to ship in the US by the end of the year. The Cambridge, Massachusetts-based firm says it's on track to manufacture between 500 million to a billion doses globally in 2021.

In London, the FTSE 100 index ended up 104.90 points, or 1.7%, at 6,421.29. The FTSE 250 closed up 388.56 points, or 2.0%, at 19,658.56. The AIM All-Share closed up 6.91 points, or 0.7%, at 1,006.53.

The Cboe UK 100 index ended up 1.7% at 640.54. The Cboe 250 ended up 2.3% at 16,952.20. The Cboe Small Companies finished up 2.4% at 10,924.80.

The CAC 40 index in Paris closed up 1.7% and Frankfurt's DAX 30 finished up 0.5%.

The news from Moderna comes on the back of similar results announced last week for a vaccine candidate developed by US pharma giant Pfizer and its German partner BioNTech.

Crucially, Moderna's vaccine requires long-term storage at minus 20 degrees Celsius, or minus 4 degrees Fahrenheit. It is also stable for 30 days between 2 degrees to 8 degrees Celsius, or 36 degrees to 46 degrees Fahrenheit.

Moderna's stock price is up 8.0% in New York.

In comparison, Pfizer's vaccine requires a storage temperature of minus 94 degrees Fahrenheit. Vaccines are fragile drugs that demand strict temperature controls.

"By far the most significant news is that the [Moderna] vaccine can now be stored at refrigerated temperatures for 30 days - a vaccine can be as effective as you want, but if you can't get it to people, it's efficacy becomes zero," said Shore Capital analyst Adam Barker.

"However, these recent data readouts are an undeniable turning point against Covid-19 and with each positive update, the route to victory (despite the upcoming hard work) becomes more and more clear," Barker added.

In the FTSE 100, travel and travel-related stocks ended among the best performers amid hopes the vaccine developments will facilitate a return to pre-Covid levels of activity in the tourism industry.

Jet engine maker Rolls-Royce ended up 9.8% and aftermarket services provider Melrose Industries closed up 8.5%.

In addition, British Airways parent International Consolidated Airlines ended up 9.8%, while hospitality firms Whitbread and InterContinental Hotels closed up 9.8% and 9.8% respectively.

Oil majors BP, Royal Dutch 'A' and 'B' closed up 5.9%, 6.5% and 6.3% tracking spot oil prices higher.

Brent oil was quoted at USD44.40 a barrel at the London close, sharply higher from USD42.88 at the close Friday.

"Crude prices are off to a solid start after President-elect Joe Biden's advisers noted a national lockdown is not on the agenda and on Moderna's late-stage clinical trial update that raises expectations for a complete return to pre-pandemic behavior before next November," Oanda Markets analyst Edward Moya said.

Vodafone closed up 6.9% after the telecommunications firm said its first half went according to plan, recording a swing to profit and reporting an improved quarter-on-quarter service revenue performance.

Group revenue in the six months to September 30 fell 2.3% annually to EUR21.43 billion from EUR21.94 billion.

Vodafone swung to a pretax profit of EUR2.05 billion from a EUR511 million loss a year earlier. The first half of the last financial year was hit by a EUR2.60 billion loss from its share of results from joint ventures. This year, Vodafone booked a EUR260 million such gain.

At the other end of the large caps, online grocer Ocado and online takeout platform Just Eat Takeaway, which had gained substantially during lockdown restrictions, ended the worst performers, down 4.1% and 3.3% respectively.

The dollar was lower across the board as investors shunned the greenback's safe-haven allure in the wake of the positive vaccine developments.

The pound was quoted at USD1.3186 at the London equities close, up from USD1.3172 at the close Friday.

The euro stood at USD1.1840 at the European equities close, up from USD1.1824 late Friday. Against the yen, the dollar was trading at JPY104.57 in London, down from JPY104.65 late Friday.

Meanwhile, a top EU diplomat warned Monday it was getting dangerously late to secure a post-Brexit trade deal as a week of crucial talks began in Brussels.

The clock is ticking down to December 31 when a post-Brexit transition phase ends and the UK and Europe will need a trade deal to govern ties - or face economic chaos.

The EU's chief negotiator Michel Barnier and his UK counterpart David Frost met again in Brussels in hopes of reaching an agreement after eight months of mostly fruitless talks.

"Let's see if there will be an agreement. We can't tell at this stage whether this will be by the end of this week, or whenever - or at all," the senior diplomat said, speaking on condition of anonymity.

Stocks in New York were higher at the London equities close following upbeat news on a coronavirus vaccine and merger announcements in the banking and retail industries.

The DJIA was up 1.4%, the S&P 500 index up 1.0% and the Nasdaq Composite up 0.7%.

On the corporate front, Spanish lender BBVA said it would sell its US unit to PNC Financial Services for USD11.6 billion, while hardware retailer Home Depot said it plans to re-acquire wholesaler HD Supply Holdings in an USD8 billion deal set to close early next year.

Gold was quoted at USD1,889.70 an ounce at the London equities close, lower against USD1,891.34 late Friday.

The economic events calendar on Tuesday has eurozone construction output at 1000 GMT and US retail sales at 1330 GMT.

The UK corporate calendar on Tuesday has annual results from tobacco firm Imperial Brands and budget airline easyJet. There are also interim results from credit checking agency Experian, home emergency cover provider Homeserve and asset manager Ninety One.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Rolls-Royce Holdings PLC 106.80 GBX -0.79
BP PLC 247.77 GBX -5.75
Ocado Group PLC 2,207.28 GBX -0.48
InterContinental Hotels Group PLC 4,643.00 GBX -2.72
Whitbread PLC 3,031.00 GBX -4.14 -
Royal Dutch Shell PLC B 1,227.89 GBX -5.84
Vodafone Group PLC 123.68 GBX -0.98
International Consolidated Airlines Group SA 154.20 GBX -4.13 -
Royal Dutch Shell PLC Class A 1,271.20 GBX -5.09
Melrose Industries PLC 153.50 GBX -3.64 -
Just Eat Takeaway.com NV 7,965.94 GBX 0.58 -
Just Eat Takeaway.com NV 89.04 EUR 0.98 -

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