Stocks rise on Moderna vaccine hopes and strong Chinese factory growth

Tom Belger
·Finance and policy reporter

Watch: European stocks rise on vaccine hopes

European stocks hit an eight-month high on Monday, lifted by stronger-than-expected Chinese factory data, the signing of a new Asia-Pacific trade deal and fresh coronavirus vaccine hopes.

US biotech company Moderna (MRNA) announced on Monday that its COVID-19 vaccine candidate had been 94.5% effective during its third-phase trials of 30,000 participants in the US.

The FTSE 100 (^FTSE) closed 1.7% higher after Modern’s announcement, reaching a five-month high. The DAX (^GDAXI) gained 0.5% in Frankfurt and the CAC 40 (^FCHI) rose 1.7% in Paris. The Europe-wide Stoxx 600 index (^STOXX) gained 1.2%, reaching its highest level in more than eight months.

US stocks also leapt later in the trading day. The S&P 500 (^GSPC) was trading 0.9% higher shortly after European markets closed, while the Dow Jones Industrial Average (^DJI) rose 1.3%, and the Nasdaq (^IXIC) gained 0.5%.

Before Moderna’s announcement, global stocks had already been buoyed by data showing industrial output in China rising quicker than expected by analysts in October, up 6.9% year-on-year. Retail sales came in lower than expected at 4.3% growth, but still marked the fastest annual rate of expansion this year.

Watch: U.S. drugmaker says its COVID-19 vaccine candidate appears to be 94.5% effective

The news boosted oil prices, with West Texas Intermediate crude futures (CL=F) up 1.6% to $43.35 a barrel at around 10am in London. Brent crude (BZ=F) futures were trading 1.3% higher.

READ MORE: 15 countries sign the world’s biggest regional trade deal

Commodity stocks were among the biggest risers in the UK on hopes of stronger demand, with Glencore (GLEN.L) up 3.1% and Antofagasta (ANTO.L) up 3%. European oil and gas firms on the Stoxx 600 index were up 1.1%, outperforming the 0.7% gains on the wider index, while vaccine hopes lifted travel and leisure stocks.

Meanwhile 15 countries including almost a third of the global population signed the world's largest regional free trade deal on Sunday, the Regional Comprehensive Economic Partnership.

In Asia overnight, Japan’s Nikkei (^N225) rose 2.1%, the Hong Kong Hang Seng (^HSI) rose 0.7%, and the Shanghai Composite (000001.SS) gained 1.1%. South Korea’s KOSPI (^KS11) rose 2%. Meanwhile in Australia, the ASX 200 (^AXJO) gained 1.2%.

Chinese factory growth was stronger than expected. Photo: Ng Han Guan/AP
Chinese factory growth was stronger than expected. Photo: Ng Han Guan/AP

Moderna’s announcement comes after similarly encouraging results from another potential coronavirus vaccine trial by Pfizer (PFE) and BioNTech (BNTX) sparked a rally on global markets early last week.

Concerns about the second wave of the pandemic had cooled the mood in Europe towards the end of the week, but virus-hit stocks were among the biggest risers on Monday.

British Airways owner IAG (IAG.L) leapt 6% on Monday morning, and was up 11.7% by mid-afternoon. Plane engine-maker Rolls-Royce (RR.L) saw its stocks jump 8.8%.

READ MORE: Bank of England governor wants ‘goodwill’ in UK-EU relations