Global stocks edge lower despite the UK's approval of Pfizer and BioNTech's COVID-19 vaccine
Reuters / Brendan McDermid
- Global stocks edged lower on Wednesday despite the British government being the first to approve Pfizer and BioNTech's COVID-19 vaccine for use.
- London's FTSE 100 was about flat in early trade, but was still outperforming most other regional indices, even though chief EU Brexit negotiator Michel Barnier said a deal "hangs in the balance."
- Approval of a highly effective vaccine may mark the beginning of a new bull market for equities, a global market strategist said.
- In the US, President-elect Joe Biden said he won't immediately remove the elevated tariffs that Trump imposed on China.
- Visit Business Insider's homepage for more stories.
Global stocks edged lower on Wednesday as investors booked profits from November's record-breaking rally, but the UK's approval of Pfizer and BioNTech's COVID-19 vaccine capped losses.
British medicines regulator cleared the vaccine for use, making the UK the first Western nation to approve one of the many vaccines in the final stages of development. The vaccine is expected to be made available next week. Meanwhile, the US will receive its first shipments of Pfizer's vaccine by December 15 and Moderna's by December 22, according to CNN.
Despite positive news, the Euro Stoxx 50 fell 0.2%, Germany's DAX fell 0.3%, and London's FTSE 100 rose by only 0.1%.
This is likely because the pound is down 0.4% against the dollar and 0.5% against the euro after reports of tension within the EU over the number of concessions Brexit negotiator Michel Barnier is potentially giving away to the UK, said Connor Campbell, a financial analyst at SpreadEx.
But other market watchers were looking beyond some of the shorter-term drivers.
"Approval of a highly effective vaccine may mark the beginning of the end to the COVID-19 economic turmoil and the beginning of a new bull market for equities," said Mike Bell, global market strategist at JP Morgan Asset Management. "The scientists have come to the rescue and delivered what investors were hoping for Christmas this year."
Bell predicted that as this year's savings are spent next year, the global economy should boom, driving corporate profits and equities higher in 2021.
Some of the biggest gainers in the UK equity market were smaller retail- or travel-related shares, such as brewery group Marston's, restaurant operator Loungers, aircraft-leasing firm Aviation, and cinema chain Cineworld, which all gained between 5% and 8% on the day.
In the US, President-elect Joe Biden said he won't immediately remove the elevated tariffs that Trump imposed on China, according to the New York Times. He intends to first review the existing Phase 1 trade deal and consult allies in Asia and Europe to develop a "coherent strategy."
Futures tied to the Dow Jones, S&P 500, and Nasdaq fell between 0.1% and 0.3%.
The MSCI All Country World index gained 12.2% in November, its best monthly performance on record, exceeding April 2009's 11.5% rise.
"We see further upside for global equities in this environment, but also expect market leadership to continue to shift," said Mark Haefele, chief investment officer at UBS Global Wealth Management. "So we recommend investors stay invested for the next leg higher in equities, but to diversify their exposure."
In Asia, Japan reported that visitors won't be required to get vaccinated before arriving for the Summer Olympics next year.
China's Shanghai Composite fell 0.07% and Hong Kong's Hang Seng fell 0.04%, but Japan's Nikkei rose 0.05%.
from Business Insider https://ift.tt/2JAH3Ey
No comments