MARKET REPORT: Second vaccine delivers shot in arm for global markets

The FTSE 100 started the week with a bang after another Covid vaccine announcement gave shares a shot in the arm.

Stock markets across the world rallied after US company Moderna said its potential coronavirus vaccine was nearly 95pc effective.

On the London Stock Exchange many of the companies hit hardest by Covid restrictions including British Airways-owner IAG, Rolls-Royce and Cineworld were among the biggest risers.

Moderna plans to apply for regulatory approval in the next few weeks and, although it is still using early data, said it was a ‘great day’.

Moderna’s update came a week after Pfizer said its vaccine had been found to be 90 per cent effective, raising hopes the world is edging closer to returning to normal.

The FTSE 100 rose 1.7 per cent, or 104.9 points, to 6421.29, bringing its total gain since Friday, November 6 – before either vaccine update – to almost 9 per cent. The rise in London was echoed across other major markets, with Paris’s Cac 40 rising 2 per cent, Germany’s Dax closing 0.7 per cent higher and the Dow Jones rising 1.6 per cent on Wall Street.

Embattled engine maker Rolls-Royce closed up 9.9 per cent, or 9.3p, at 103p, barrelling to the top of the Footsie leaderboard, as the promise of multiple vaccines made it more likely that global air travel will bounce back.

Stock Watch – Block Energy 

Block Energy shares rose after it reported a processing facility at one of its sites is now ready to receive gas.

The facility is hooked up to two wells on the West Rustavi oil and gas field, which is roughly south east of the Georgian capital Tbilisi.

The exploration company said it is waiting for another pipeline to be laid before sales of the gas can start.

Investors hailed the AIM-listed group’s latest progress and sent its stock up 42.6 per cent, or 1.3p, to close at 4.35p.

Rolls-Royce earns a large chunk of its money from the number of hours its engines on passenger aircraft fly.

Premier Inn-owner Whitbread (up 9.8 per cent, or 273p, to 3054p) and airlines group IAG (up 9.8 per cent, or 14.15p, to 158.75p) also climbed.

The mid-cap FTSE 250 jumped 1.8 per cent, or 338.05points, to 19608.05, as it too was bolstered by travel and leisure stocks. Cineworld shot up 13.5 per cent, or 5.92p, to 49.76p, while cruise operator Carnival rose 12.2 per cent, or 131.5p, to 1212.5p.

Train and airport cafe operator SSP, which runs Upper Crust outlets, was another winner, rising 11.8 per cent, or 39p, to 368.8p, while WH Smith, which has seen its turnover slump at its lucrative travel branches, finished up 9.7 per cent, or 131p, to 1484p.

Conferences group Informa managed to climb 2.2 per cent, or 12.4p, to 573.6p, despite being downgraded to ‘hold’ by Berenberg brokers, who claimed a recovery in the business events industry had already been built into its share price.

Although companies in pandemic-hit sectors rallied throughout the main indexes, the small caps and AIM, many of the so-called ‘lockdown winners’ had a far worse start to the week.

Grocery delivery giant Ocado, which has come into its own this year amid shopping restrictions, fell 4.1 per cent, or 94p, to 2189p, while takeaway firm Just Eat Takeaway tumbled 3.3 per cent, or 280p, to 8134p.

On AIM, stock market darling Novacyt, which developed one of the world’s first Covid tests back in January, shed 11.7 per cent of its value, falling 104.5p, to close at 792.5p.

Beyond the vaccine rally, investors’ attention turned to Royal Mail, following media reports that the Post Office is looking to end an agreement that dictates it can only handle Royal Mail letters and parcels. 

Terminating the arrangement would potentially enable the Post Office to process packages from Amazon and other big online retailers – which have thrived this year during lockdowns.

Shares in 504-year-old Royal Mail dropped 1.7 per cent, or 4.6p, to 270p last night.

Traders were less ruffled by the abrupt departure of contractor Capita’s finance boss.

The FTSE 250-listed outsourcer’s shares fell 0.3 per cent, or 0.1p, to 39.1p, after Patrick Butcher left after less than two years in the post. Capita said he was leaving to ‘pursue other opportunities’.