The bar was raised for markets to rally following an announcement by Pfizer that its vaccine protected 90 per cent of COVID-19 cases in a study, investors and strategists said.
Good vaccine news helped ease that flow, even as daily US coronavirus cases topped 150,000 and states and cities enacted curfews and closures.
Investors have rotated out of stocks associated with the stay-at-home theme on Covid-19 vaccine optimism, but experts are warning that the winter months could be brutal as cases continue rising.
Strongest reversal in two decades
Investors are also keeping a close eye on US-based pharmaceutical firm Moderna Inc.’s upcoming COVID-19 vaccine trial results as well. Moderna is due to report results on its version soon.
However, as far as investors are concerned, analysts say any vaccine-related impact may already be priced-in for any asset trading on the markets.
Long road for vaccine adoption
Wall Street’s key S&P 500 benchmark rose 1.4 percent Friday, exceeding its September 2 closing record of 3,580.84 points, after having toyed with that high for days.
The sharp gains was first because of the view that the presidential election delivered an outcome that could lead to growth next year, and later after Pfizer released surprisingly good trial results for its vaccine candidate. The rally has left the S&P 500 up 9.6 per cent this month.
Another Brexit deadline nears
Global investors will turn their attention to the new November 19 Brexit “deadline” for negotiators to come up with a trade deal. Markets are hoping a deal will be in place soon in order to present it to European Union leaders via their video conference on Thursday.
In addition to the Brexit saga, the UK and EU must continue to deal with the ongoing coronavirus pandemic which continues to keep countries in turmoil. In the UK, the country continues to remain on lockdown.
When it comes to economic data releases in different parts of the world, this week investors await the release of retail sales figures for China, the UK and the US, along with UK inflation data.
UAE bourses eke on gains start of week
Both UAE bourses eked out gains at the start of the week, as regional investors took into account how global markets have been rallying the past week on vaccine hopes and a faster economic recovery.
The Dubai Financial Market (DFM) ended up 0.27 per cent on Sunday, while the Abu Dhabi Securities Exchange (ADX) edged up 0.33 per cent.
Elsewhere, the Gulf region’s largest bourse benchmark – Saudi Arabia’s Tadawul – ended up 0.76 per cent on Sunday, while the indices in Kuwait, Bahrain and Jordan slipped.