European stocks rallied on Monday as markets around the world made gains following Joe Biden’s projected election win and positive vaccine news from Pfizer.
European markets were alreadyy tracking their global counterparts higher as investors reacted to Democrat Joe Biden’s defeat of incumbent Donald Trump in the U.S. presidential race, according to NBC projections.
Stocks then received a further boost during late morning trading in Europe, as U.S pharmaceutical giant Pfizer and German biotech firm BioNTech said their coronavirus vaccine was more than 90% effective in preventing Covid-19 among those without evidence of prior infection.
Paul Craig, portfolio manager at Quilter Investors, said the news marked a “first major step back to normality” for the countries worst hit by the virus.
“However, this vaccine is not a silver bullet. Many of the issues facing developed economies now are structural and a vaccine is not going to prevent the large scale unemployment we are likely to see as a result of the lockdowns of earlier this year,” Craig added.
He noted that for now, the companies whose shares were benefiting primarily represented a “reopening trade” of sorts.
“This means the laggards of the past few months, the likes of hospitality and airlines, are up significantly, while the mega-cap tech stocks are flat.”
Stocks in Asia-Pacific also made large gains Monday and U.S. stocks looked set to continue their big post-election rally as futures rose in early morning trade.
In the U.S., stocks rallied to record levels. The Dow Jones Industrial Average hit a record high at the open, as did the S&P 500.
The former vice president sealed the race after his projected victory in Pennsylvania as well as Nevada, according to NBC News projections on Saturday. The call came four days after Election Day and amid close counts in several battleground states.
Nonetheless, Trump is refusing to concede the election, claiming it’s “far from over.” His team has launched lawsuits in multiple key states, including Pennsylvania and Michigan, and have signaled they plan to press for recounts in some close races.
Meanwhile, coronavirus infections continue to surge stateside. The U.S. recently reported more than 126,000 new infections for two days in a row. Globally, the number of coronavirus infections crossed the 50 million mark on Sunday, according to Reuters.
In terms of individual share price action, airplane engine manufacturer Rolls-Royce surged more than 44% while British Airways parent IAG jumped more than 35% to lead a broad rally for travel stocks on the vaccine news.
