Share prices supported by easing blockages and hopes for Covid vaccine | Business


Share prices rose sharply on global stock markets amid easing lock-in restrictions, announcement of Franco-German bailout for Europe and growing hopes of vaccine for Covid -19.

In one of its strongest trading days since the onset of the crisis in March, the FTSE 100, which measures the market performance of the city’s major companies, gained 248 points and ended the day at 6,048. .

Travel companies and airlines were among the biggest winners, with cruise ship Carnival up nearly 15%, owner of British Airways IAG up 11% and easyJet up 10%. Mining stocks also rallied in hopes of a recovery in global demand.

Dow Jones’ industry average on Wall Street opened strongly after Moderna, a biotech company based in Boston, Massachusetts, announced encouraging results from the first trials of a new vaccine.

Oil prices have also risen with optimism that the gradual opening of European countries and individual US states marked a turning point in a crisis that has seen share prices plummet in the past three months. Despite its sharp increase of more than 4% on Monday, the FTSE 100 is still down almost 20% from its pre-Covid level.

Even bigger gains were made on the stock exchanges of other European countries after the announcement that Angela Merkel and Emmanuel Macron had accepted the creation of a European stimulus fund of 500 billion euros (441 billion pounds sterling) ) whereby the European Commission could borrow money on the financial markets. . The German Dax index closed up 5.7% while the French CAC closed up 5.2%.

Edward Moya of Oanda said, “The start of the trading week was supposed to inspire some optimism about the global economic recovery, but no one expected Monday to start.

“Risk appetite is rampant after the experimental Moderna vaccine has shown promising early warning signs to create an immune response that may be able to fight Covid-19. Global stocks are booming higher over vaccine hopes combined with the reopening of major economies and as the Fed continues to promise that new stimulants will come in when needed. “

The stock market rally came despite a warning from the head of the International Monetary Fund, Kristalina Georgieva, that a full recovery was unlikely for the world economy in 2021.

In April, the IMF said it expected activity to fall 3% this year, followed by a 5.8% rebound in 2021, but bad economic news since then has made Georgieva less optimistic.

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The managing director of the IMF told Reuters that the data had been worse than expected, adding: “This obviously means that it will take us a lot longer to fully recover from this crisis. “

With the financial markets scared last week in the face of growing trade tensions between the United States and China, Georgieva also warned against the use of protectionism by countries.

“We have to keep trade flows open, especially for medical supplies, food and in the longer term, in order to find a way to overcome what is currently going on with this crisis,” she said. “We want to continue to build this more prosperous future for all by overcoming the scars that may result from this crisis.”


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