Coronavirus Vaccine gives hope to Global stocks that eyed a fresh record high on Monday. It can be taken as signs of economic recovery in Asia. The recent strong corporate earnings has heightened the hopes of investor sentiment.
The announcement, a week ago, that Pfizer had developed a very effective vaccine has investors hoping for good news soon from rival Moderna and looking past a tough winter to a better spring and summer ahead.
The MSCI World Index of global shares rose 0.5 per cent to 608.79 points. It can be recorded as a high hit briefly earlier in the month which has been assisted by strong overnight gains in Asia’s leading markets. It has made the markets stronger and open for most European bourses.
MSCI’s broadest index of Asia-Pacific shares outside Japan. It has bee scored as a hit and its highest level since launching in 1987 as Japan pulled out of recession. China also posted better-than-expected industrial output data as the region has signed the largest ever trade deal.
Taking the lead, European indices rose with Britain’s FTSE 100 and the pan-Europe STOXX Europe 600. Both of them are up by around 0.7 per cent. The markets get the new trading week off to a solid start has encouraged and given all the excitement generated in the last seven days by news of coronavirus vaccine breakthroughs as told by AJ Bell investment director Russ Mould. He emphasised on solid and steady gains that are arguably just what investors need after a very volatile period.
The prospect of economic recovery will even assist oil prices strengthening, and Brent crude futures and West Texas Intermediate will go up around 0.8%, just off their intraday highs. European government bond yields amid all the optimism also fell back with Italian benchmark 10-year yields down of 3 basis points.
Not each and every asset was swept up by the rising tide. It is seen that it will be weighed down by fresh data over the weekend with the dollar flat against a basket of currencies, showing an increase in the number of COVID-19 cases. Gold although has steadied near a one-week high which is up 0.3 per cent at $1,893 an ounce. Since the rise in the cases of the coronavirus were a risk, Morgan Stanley strategists has tried to urge investors to “keep the faith” in their 2021 outlook note. They asserted that this global recovery is synchronous, sustainable, and supported by policy, following the ‘normal’ post-recession playbook. It has been projected to overweight equities and credit against cash and government bonds, and sell dollars.
For stocks, the analysts see earnings-per-share growth of between 25 per cent and 30 per cent across regions, with double-digit total returns through the end of 2021 that should helped power the S&P 500 to 3,900 points from its current 3,585 points.
Brexit trade talks were chief among European investors’ concerns on Monday, with hopes for a breakthrough ebbing slightly to leave sterling weaker against the dollar and the euro, besides the virus. The British pound changing hands at 1.3176 per dollar, gave up early gains to edge lower against the dollar, and against the common currency as well, and last stood at 89.90 pence per euro.