With the news of Pfizer’s coronavirus vaccine, the benchmark indices all over the world have reached an all time high. The Pfizer and BioNtech, companies responsible for the vaccine, say that according to the data the vaccine is over 90 per cent effective in preventing the novel coronavirus caused disease COVID-19 and that too without any serious safety concerns so far. They are also the first drug makers to declare the data obtained from large scale clinical trials of the vaccine.
On Tuesday , the shares of the company itself (Pfizer) zoomed nearly 20 per cent after their vaccine candidate was found to be over 90 per cent effective in preventing the disease. On the Bombay Stock Exchange, the stock jumped as much as 16.29 per cent to end at its record high of Rs 5,875 while at the National Stock Exchange or NSE, it surged 19.83 per cent to attain its lifetime high price of Rs 5,900.
Dow and S&P hit lifetime highs
On Monday, the S&P 500 and Dow hit an all-time high with the first success of late-stage clinical trials of a Covid vaccine. The results had sparked a hope recovery and rejuvenation amid the emerging economic crisis.
Dow, The blue-chip index, jumped as much as 5.7% intra-day. The surge was facilitated by the vaccine news as well as Joe Biden’s close victory in the fist-clenching close elections of the United States. Airline and cruise line operators, the companies that were the worst affected by the pandemic and the social distancing restrictions and travel bans, seem to be trading 20 per cent to 30 per cent higher now. Such companies include Boeing Co which recorded a surge of 12.6 per cent. Oil prices also jumped up nearly 10 per cent while the US Treasuries sold off.
By 01.36 pm EST, the Dow Jones Industrial Average jumped up by 4.80 per cent to settle at 1,359.24 points while the S&P 500 surged 3.19 per cent leading to a jump of 111.95 points. At the same time, the Russell 2000 small-cap index reached its all-time high as it witnessed a rise of 5.7 per cent intra-day.
NASDAQ and other trade-offs
The tech heavy index, NASDAQ Composite, surged 83.47 points, marking a jump of 0.70 per cent to settle at 11,978.70 points. The jump was staggered by the drop ranging between 1.6 percent and 4.7 per cent in Amazon.com Inc, Netflix Inc and gaming company Activision Blizzard Inc.
Even though the stock all over the world hit a record high during the day, the dollar continued to remain weak. This was because under the new president, Joe Biden, there were hopes of better global trade expectations and more monetary stimulus which lead to lifting up the demand for risky assets.
The pan-European STOXX 600 climbed nearly 4 per cent to encounter its best performance day since late March. The FTSE 100, the export heavy index, also surged 4.7 per cent and at the same time the British mid-cap index rose 5.2 per cent.
Brent crude oil rose by $ 3.17 to reach $ 42.62 per barrel, marking a jump of 8.04 per cent. The US West Texas Intermediate, commonly abbreviated as WTI, crude reached $40.49 encouraged by a surge of 9.10 per cent or $3.38 per barrel.
On Monday, the Indian domestic stock markets also staged a strong rally. The hopes of better economy and lesser restrictions encouraged the investors to hype up the markets. The Sensex jumped 704 points, ending at a new high of 42.597.43 points while the Nifty50 surged 198 points to settle at 12,461.05. The foreign portfolio investors, also called as FPIs, invested fresh Rs. 4,547 crore into the Indian equity market. At the same time, the rupee opened at 73.94 per dollar and closed at 74.15 in comparison to the earlier close of 74.20
Banks reacted positively to the news with Bank of America jumping 14.2 per cent and JPMorgan Chase rising 13.5%. Cruise operators Norwegian Cruise line and Carnival Corp. saw a surge of 26.8 per cent and 39.3 per cent, respectively. At the same time, Royal Caribbean popped 28.8 per cent and American Airlines surged more than 15%.
Gold prices saw a huge drop as investors pivoted to riskier investments
The gold prices saw a major decline. On Monday, the gold slipped by as much as 5 per cent with the news of Pfizer’s covid vaccine. The announcement prompted the investors to deviate from the safe-haven investment and flock towards riskier assets or stock markets with greater returns. By 11.07 EDT, spot gold had jumped down by 5.1 per cent to reach $1855.30 per ounce, witnessting a retreat from two-month high of $ 1965.33 hit amid weaker dollar expectations and more stimulus after the US election results were declared.
All “stay-at-home” stocks face a downfall amid vaccine hopes
Zoom Video’s shares fell discreetly on Monday, as people reacted sharply to the news of Pfizer’s coronavirus vaccine. The stock closed at a value that was 17.4 per cent lower while others stay at home stock, Amazon, dropped 5.1 per cent. Netflix Inc, Shopify, and Teladoc Health also plunged by 8.6 per cent, 13.6 per cent, and 13.7 per cent respectively.
Before witnessing this fall, Zoom video had surged as high as 635 per cent year to date while Netflix and Amazon were at a high of 59.1 per cent and 79.2 per cent, respectively. Not only this but in 2020, Teladoc jumped by 146.2 per cent while Shopify rose up 162.8 per cent.