The results of AstraZeneca and Oxford University’s Covid-19 vaccine trial result failed to trigger a major rally in equities with the 70% efficacy result perhaps disappointing in comparison to the 95% results from Pfizer and Moderna, says Russ Mould, investment director at AJ Bell.
“In relative terms one can understand why AstraZeneca’s result only triggered a shrug of the shoulders from investors. However, a 70% result is still positive for helping society return to normal and there are significant cost and storage benefits with the AstraZeneca jab.
“AstraZeneca’s shares slipped 1.6% to £81.85 on the news even though the trial result should be taken as a positive step forward in combating Covid-19.
“The FTSE 100 advanced 0.3% to 6,371 with energy, mining and industrials among the top performing sectors, showing that investors are flocking to parts of the market that should benefit from economic recovery. However, the scale of the market gain was relatively mute thanks to weakness in utilities and healthcare stocks acting as a drag on the FTSE 100.
“The FTSE 250 fared better, up 0.7% 19,644, thanks to the expectation of England coming out of lockdown on 2 December and more shops and businesses being able to reopen. Sterling strengthened 0.5% against the US dollar to $1.3352 and by 0.4% against the euro to €1.1251 in reflection of stronger economic recovery prospects.
“Markets in mainland Europe advanced by approximately 0.9% while Asian markets were mixed.
“Investors are now looking for clarity on several measures, namely Donald Trump conceding defeat in the US presidential election and for a Covid-19 vaccine to be approved for use. Both of those events could create a new tailwind for equities and bring some Christmas cheer after a miserable year for so many people.”