The world is desperate for a coronavirus vaccine and it seems that investors were only happy to put their money in one place on Monday – healthcare, says Russ Mould, investment director at AJ Bell.
“Markets had a shaky start to the new week with mixed progress in Asia and declines across Europe including a 1% decline in the FTSE 100 to 6,224.
“One of the select few stocks to rise on the FTSE 100 was AstraZeneca, extending a rally that’s been in motion since mid-June.
“Investors have warmed to AstraZeneca both on hopes that it will successfully develop a treatment for Covid-19 and the fact the company is making progress with other drug developments. Early stage trial data is set to be published today on its coronavirus vaccine so the shares could be in even more demand if the news is encouraging.
“On a similar theme, shares in Synairgen shot up by 188% on positive results from its clinical trial of a new treatment for Covid-19.
“Many small cap biotech stocks have this year gone from being unloved to the star of the show as far as investors are concerned, despite the considerable risks to their money if drug developments are unsuccessful.
“Synairgen’s share price has gone from 5.88p at the beginning of January to 103.98p, adding up to a 1,668% rise.”