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News of another major vaccine breakthrough has sparked fresh enthusiasm for the sectors hardest hit by the pandemic, while dampening the prices of ‘stay at home’ stocks such as Ocado and Zoom.
On Monday, US biotech company Moderna revealed that its Covid-19 jab had shown 94.5 per cent efficacy in late stage trials. The news prompted a broad based rally for equities but knocked some stocks that have benefitted from people spending more time at home.
Travel, leisure and retail on the up: Shares in International Consolidated Airlines, owner of British Airways, rose by more than a tenth on the back of the Moderna news, changing hands at 162p. Budget airline operator easyJet also climbed by 7 per cent, while the share price of tour group Tui advanced 8 per cent. Travel companies have been among the worst affected by the coronavirus crisis, as widespread lockdowns and border closures have grounded flights and squeezed cash flows.
At the same time, shares in Cineworld, which has suffered badly from virus-induced closures and film release delays, leapt by almost a fifth to 52p.
Retailers also enjoyed renewed gusto on Monday afternoon, with shares in Primark’s parent company Associated British Foods edging up by 4 per cent to 2,060p. Its physical stores are currently closed under new England-wide lockdown rules. Likewise, shares in FTSE 100 landlord Land Securities, which owns offices and retail properties, rose by 5 per cent.
‘Stay at home’ declines: Shares in online grocery platform Ocado slipped by 5 per cent to 2,203p. Investors fear surging demand for digital shopping during the pandemic could wane, as swathes of people transition back to normality.
The share price of US video conferencing group Zoom also declined by roughly 6 per cent in pre-market trading as investors digested the idea that face-to-face meetings could make a come-back.
Pharma competitors slip: Pfizer shares fell 1.8 per cent following the Moderna update and BioNTech shares were down 6 per cent in pre-market trading. A week earlier, the two companies had revealed that the separate Covid-19 vaccine they are developing was more than 90 per cent effective.
Shares in Aim-traded biotech company Synairgen took a hit to the tune of 10 per cent on Monday afternoon. The group revealed last week positive trial data for its Covid-19 drug in a leading medical journal. But the market is ostensibly concerned that a successful vaccine – if it passes through regulatory approvals and safety checks – will do away with the need for such treatments.
Likewise, shares in London-listed, France-based Novacyt fell by roughly 10 per cent to 800p. They started the year at 14p, but have been buoyed by the group’s development of specialist Covid-19 tests.