Vaccines And Biden Transition Boost Market Confidence

As the US begins to approach a resolution to its political deadlock, AstraZeneca vaccine news offered further reassurance to international markets.

European markets and US futures saw a boost on Tuesday as the promise of a COVID-19 vaccine and the start of a formal transition towards the incoming Joe Biden administration contributes to an increase in investor confidence.

In the United Kingdom, the FTSE 100 gained 0.9%, while France’s CAC 40 and Germany’s DAX both rose by 1%. The pan-European Stoxx 600 also rose 0.7% while oil and gas stocks bounced by 3%, with almost all sectors and major bourses heading into positive territory.

Nasdaq, S&P 500 and Dow Jones futures saw gains of their own, rising 0.5%, 0.7% and 0.8% respectively.

On the flip side, Asian markets saw mixed results overnight. South Korea’s KOSPI was up 0.6% while the Hong Kong Hang Seng rose by 0.3%, but China’s Shanghai Composite and Shenzhen Component slid by 0.3% and 0.4% respectively. Australia’s S&P/ASX 200 and Japan’s Nikkei saw the biggest gains, rising by 1.8% and 1.11% respectively.

On Monday, US General Services Head of  Administration Emily Murphy wrote a letter to President-elect Joe Biden confirming that the formal transition process could begin. Also, on Twitter, President Donald Trump wrote in a post that he had told his team to “do what needs to be done with regard to initial protocols,” though there were no indication of foregoing his earlier claims of voter fraud perpetrated against him during the election.

Another positive news that may have cheered the market is Biden’s reported plans to take on former Federal Reserve Chair Janet Yellen as the next US Treasury Secretary.

Expert posit that risk appetite was further boosted by ongoing progress in the development of COVID-19 vaccines. AstraZeneca recently announced that its vaccine candidate could have an efficacy of as much as 90% and that it is also cheaper to make, faster to scale up and easier to distribute than the vaccines produced by rivals Pfizer and Moderna.