FTSE 100 makes slow start despite vaccine news

The FTSE 100 had a subdued start to the day despite news that the UK had approved the Pfizer/Biontech coronavirus vaccine.

The blue-chip index opened in the red and after an hour was up 0.1%. Analysts have said that it is likely that because the pound is down 0.4% against the dollar and 0.5% against the euro, following the reported tension within the EU and the ending of the transition period.

Despite the slower morning on the FTSE 100, yesterday it surged 2% as it continues November’s rally.

“The lack of market reaction suggests that this decision was probably widely expected at some point, and perhaps the real challenge now lies in the production, as well as the speed of any rollout of the two jab treatment,” said Michael Hewson from CMC Markets.

“Ultimately even if a vaccination program was to start this month, the fact that two jabs are required means that it’s likely to be several months before we start to see a possible economic benefit in terms of an easing of restrictions.”

Meanwhile, in Europe the DAX was down 0.7%, while the CAC saw a 0.4% drop.

In the US, main markets hit new record highs after there was news that talks over a new stimulus package were continuing.

Connor Campbell from SpreadEx said: “Failing to close above 30,000 yesterday evening, instead finishing at 29,823, the Dow Jones is set to retreat this afternoon, the futures pencilling in a 130 point fall. It may take FDA approval of the Pfizer and Moderna vaccines to get the Dow to spend more than a few hours at a time the right side of 30,000.”

Commenting on what the vaccine rollout in the UK means, he add: “It’s another step closer to pre-pandemic normality, and though there are still, minimum, months of lockdown measures left, and a war’s worth of economic damage to undo over the next few years, the markets are firmly focused on the long-term.”