- This week, investors have pumped a whopping £33.8 billion into global equity funds
- Returns on ten-year government bonds in UK grew by 22.4 percent this week
- Promising results from the late-stage Covid-19 vaccine trial of Pfizer and Biontech sent up markets on Monday
On Friday, the FTSE 100 capped its best week since April, as anticipation for a coronavirus vaccine has decreased at a critical moment for Brexit talks, in the midst of the soaring COVID-19 pandemic and upheaval at Downing Street. This week, investors have pumped a whopping £33.8 billion into global equity funds, Bank of America analysis has revealed.
They have invested £13.5 billion in currency, signaling a move from safety to offensive.
Returns on ten-year government bonds in UK grew by 22.4 percent this week, indicating intense purchases and reaching their highest pace since late March on Wednesday. When rates drop, yields increase and prices decline when demand declines.
Promising results from the late-stage COVID-19 vaccine trial from Pfizer and Biontech sent markets up on Monday and extended a rally that started after last week’s US election. The rebound accelerated, as short-sellers had to shut down, losing bets on bank turnaround, travel and leisure shares.
Ian Read, former CEO of Pfizer, stated in an interview with reporters that the vaccination was a beginning of the peak of the crisis. Pfizer and Bionech said their vaccine was more than 90 percent effective, comfortably beating analysts’ 60-70 percent efficacy predictions, and the US drug regulators’ 50 percent threshold.
Mr Read, 67, was an American drug producer when he completed his first partnership on flu vaccine studies with Germany’s Biontech two years ago. He said that vaccine trust was assured and that the strong effectiveness would have a fundamental influence on society.
Last week, the rally reached a bump as coronavirus infections in Europe and the United States spiked higher than anticipated, increasing concerns of prolonged lockdowns. Confirmed regular cases of COVID-19 in the UK on Thursday have risen to a record 33,470, and more than 160,000 day-to-day infections were registered by the US just a week after hitting the 100,000 mark.
The FTSE 100 rose by 14.4 percent for eight consecutive sessions to Wednesday this week. Yesterday it was down 0.4% or 22.55 to 6.316.39 marks. The UK leading share index decreased by 15.3% after stocks started to crash in mid-February.
FTSE 250 Ended at 19,270.00
Brent crude, the foreign oil price index, rose 8.4% per week as investors bet that an efficient vaccination will restore energy demand faster than commonly expected.
On Wall Street, dwindling expectations of Washington’s eventual fiscal incentive and growing confusion about the White House’s orderly change of leadership have dulled vaccine euphoria.
Thursday in New York, the S&P 500 was 1.5% stronger by the end of the week. It rose by 0.7 percent to 3,562.89, or 25.88 points a day. Since mid-February, the index has risen by 5.2 points. The smaller Dow Jones Industrial Average for the week was 3.5% and 230.94 marks, or 0.8%, higher for the day at 29,311.11. After mid-February it has been approximately flat.
The technology-driven Nasdaq index suffered as investors from mega-cap technology firms, whose securities have dramatically rallied since the beginning of the pandemic. The index has dropped by 2.8% for the week, but has risen by 0.3%, or 37.29 points for the day, by 11,746.88. Since mid-February, it has risen by almost 20%.
Last week, the pan-European Stoxx 600 index grew by 5.3 percent. Nikkei in Japan gained 4.4% per week, taking their two-week rise to 10.5%. Hong Hong’s Hang Seng improved by 1.7% this week with Chinese Shanghai Composite approximately flat.
This week, ten-year Gilts in the UK climbed to 0.438%. They were 0.339 percent last. Gold, another safe haven currency, dropped 3% throughout the week.