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New Pfizer vaccine results boost stocks despite alarm over rising cases and curbs

Tom Belger
·Finance and policy reporter
·2-min read
A general view of a Covid-19 mobile test centre sign at the entrance to Bannockburn High School near Stirling. Scotland is currently using a tier system to try and drive down coronavirus cases.
Stocks slid on virus concerns on Wednesday. Photo: PA

European stock markets edged higher on Wednesday, as new vaccine hopes offset concerns over coronavirus rates and restrictions.

Pfizer (PFE) and partners BioNTech said their vaccine candidate was 94% effective among over-65s, giving stocks a slight lift after sparking major gains with their first announcement last week.

But analysts said investors were also starting “to focus more on the near-term issues of the economic damage caused by extended lockdowns and restrictions, rather than the prospect of a vaccine that still remains some weeks away,” said Michael Hewson, chief market analyst at CMC Markets UK.

Britain’s FTSE 100 (^FTSE) and Germany’s DAX (^GDAXI) were up 0.5% in mid-afternoon trading, while France’s CAC 40 (^FCHI) was 0.6% higher after opening lower. It followed declines on Tuesday as investors’ enthusiasm over Pfizer’s (PFE) and Moderna’s (MRNA) promising vaccine news appeared to lose some steam.

READ MORE: Pfizer says its COVID-19 vaccine ‘94% effective in over 65s’

A UK government medical adviser said on Tuesday that England may need stricter regional restrictions once its current lockdown ends in December. Meanwhile Germany is considering tightening restrictions. France's health minister has also warned against any "let up [of[ our efforts too early.”

Tighter rules have been announced in several US states including California and Iowa, as well as in Sweden and in South Korea's capital Seoul on Tuesday.

Watch: How will a vaccine be administered? What about adverse reactions?

READ MORE: Autumn clothing pushes UK inflation higher in October

Virus concerns also weighed down vaccine hopes in the US on top of weaker-than-expected economic data, with the three main indices closing lower on Tuesday and stocks trading only slightly higher on Wednesday. Infections recorded in a day have surpassed 160,000 for the first time, in a grim milestone, while consumer spending data was the lowest since April.

The S&P 500 (^GSPC) was trading 0.1% lower, while the Dow Jones Industrial Average (^DJI) rose 0.3%, and the Nasdaq (NQ=F) was down 0.1% as Pfizer’s latest announcement gave only a modest lift to stocks.

“With cases of coronavirus continuing to rise sharply in the US, and various states locking down in the face of colder weather, and rising cases, it is now becoming much more obvious that the next two months are likely to be even worse for US businesses, particularly since another fiscal stimulus plan still seems quite some way off,” added Hewson.

Japan’s Nikkei (^N225) also lost 1.1% overnight after new infections hit a record high in Tokyo.

But a better short-term outlook on infection levels meant less pressure on stocks on other leading Asian indices. Hong Kong’s Hang Seng (^HSI) closed 0.4% higher, while the Shanghai Composite (000001.SS) gained 0.2%.

Watch: US, Europe plan vaccination schemes as second virus wave builds