The FTSE 100 rose on Monday as investors found confidence in reports a vaccine could be fast tracked in the United States where there was also optimism around a possible treatment using plasma.
“European markets have kicked off the week in style, with the FDA’s decision to approve the convalescent plasma coronavirus treatment raising hopes that we could see a vaccine fast-tracked before long,” said Joshua Mahony, Senior Market Analyst at IG.
“Rumours of a move to fast-track the Oxford-led vaccine may have provided a boost for global market sentiment, yet significant question remain over whether we would see significant participation without the full development process having been undertaken.”
“This move to push through a treatment could play a crucial role in helping to bring down the casualty rate in the US, with that coronavirus response intrinsically linked to the upcoming election,” Mahony said.
With elections in November, the roll out of a vaccine in October would be seen as a boost to Trump’s chances of another term in the White House.
However, a UK Government spokesman said the Oxford vaccine would first be distributed in the UK as the UK already has a 100 million order in place. This raises questions over a fast tracked distribution in the United States, given October is now juts 6-weeks away.
AstraZeneca, the pharmaceutical company driving the trials for the vaccine, rallied 4% on the news.
The FTSE 100 was followed higher by European indices as travels shares rose on hopes of a return to normalised travel.
“Jumping – literally – at the chance to turn their attentions to something positive, the European markets came out of the gate hot. The FTSE just about returned to 6100 following a 100 point surge, with the DAX crossing 12950 thanks to a 1.7% increase. Better than both of its more popular peers, the CAC added 2%, leaving it at 4980,” said Connor Campbell, analyst at Spreadex.
