LONDON (Reuters) – Global stocks edged up and the dollar rallied on Wednesday as positive news on the COVID-19 vaccine more than offset concerns over the stubbornly high global infection rate.
The MSCI World Index was up 0.1% at 12:06 GMT, just below the record from the previous session. US equity futures, meanwhile, pointed to a higher opening on Wall Street, with the prior month’s S&P 500 contract up 0.3%.
After opening lower, European stocks returned to the dark, with the STOXX 600 index rising 0.3%, following overnight gains in Asia, where China’s stimulus hopes helped MSCI’s largest regional gauge to increase by 0.7%.
News before the bell from pharmaceutical company Pfizer that its COVID-19 vaccine was 95% effective and that the company would seek emergency clearance in the United States within days helped boost its stockpile by 3% and give greater reach to markets.
This helped futures contracts reverse most of the drop from the previous day, when weak retail sales and the rising infection rate in the United States, combined with uncertainty over the further upturn in the market. government, had weighed on sentiment.
While news from Pfizer helped the dollar hit its lows – it had previously slipped against a basket of currencies to its lowest since November 9 – the news was not enough to push it into positive territory .
As the release of two data from successful coronavirus vaccine trials over the past week has boosted markets, the still high infection rate around the world is likely to cap gains, said Jane Shoemake, fund manager London based at Janus Henderson.
“People can see the light at the end of the tunnel now and the markets have clearly responded to that, but it’s not going to go up in a straight line because we still have to go through winter … (and) it’s going to continue to temper some of the exuberance people feel.
That said, strong third-quarter corporate profits also continued to support positive stock market sentiment, analysts at Barclays said, with companies “confident about the outlook and in control of costs,” they said in a note. to customers.
“This strengthens the case for a strong earnings rebound and a recovery in business activity in 2021, as the cyclical recovery unfolds.”
Cormac Weldon, head of US equities at Artemis, UK asset manager, said if the overall picture for investors was clearer, the recovery would likely be patchy.
“Low inventories and the need to manufacture and distribute goods are likely to be the primary drivers of the recovery, with the re-emergence of consumer demand adding a powerful second phase.”
With stocks still well supported, other risky markets have taken courage as well, with US crude futures and Brent futures up just over 1.8%, supported by the hope that OPEC will delay a planned increase in production.
Safe-haven gold, meanwhile, fell 0.5% to $ 1,868.6 an ounce, with US gold futures also slightly lower.
In European debt markets, Germany also saw its benchmark 10-year government bond strengthen slightly to stabilize on that day, after falling to its lowest since Pfizer issued an update. positive day of COVID-19 vaccine a week and a half ago.
“Yields continue to decline as more and more warning signs emerge on the near-term outlook,” said Benjamin Schroeder, senior rates strategist at ING.
“Eurozone spreads seem to have eyes only for QE (quantitative easing), thus avoiding volatility and setbacks in the EU,” he said, referring to this week’s information. according to which Hungary and Poland blocked the adoption of the 2021-2027 budget and of the recovery fund Governments of the European Union.
Editing by Kim Coghill, Larry King, Toby Chopra and Alex Richardson