COVID-19 Vaccine Development and How it Affects the Stock Market

The recent rollout of the COVID-19 vaccine in the UK and the USA has already got trading analysts reshuffling portfolios. They are doing this to strategically ready themselves for a potential market recovery. Broking analysts and key people in the global stock market arena predict a surge in corporate earnings.

Strong Vaccine Candidates

In November 2020, when the world had already suffered the effects of the virus called COVID-19, some respite came along. This was when Moderna Inc., a US-based pharmaceutical company, proclaimed the efficacy of its vaccine candidate as being 94.5 percent. The company had conducted successful Phase 3 trials, and the vaccine showed it could prevent the coronavirus. Its stock rose, and under the circumstances, this was no surprise. One week prior to this announcement, the pharma giant, Pfizer Inc with BioNTech claimed that their vaccine was 90% plus effective in the prevention of COVID-19. Global markets, along with equities are already reacting to vaccine announcements, trading near astonishing highs.

Commodity and currency markets will be impacted in a positive manner, too, as vaccines have started rolling out in major nations around the world. The US and the UK, with UK in the lead, have started administering vaccines to front line workers successfully. Countries that have followed suit are some Gulf nations and Hungary. France, Germany, and Italy are soon to be among the nations administering the Pfizer vaccine.

Equity Market Impact

Equity markets in the world are being bullish in anticipation of a COVID-19 vaccine breakthrough. The vaccine, long-awaited, has arrived like a miracle to solve economic, financial and symptomatic issues of people everywhere. Trading has shown a significant increase, as several listed companies portray improvements in their second quarter earnings. Experts believe that this indicates surefire financial earnings upgrades in stocks of many companies, with the momentum in a gradual upswing.

The equity market boost is seen everywhere. For instance, in Indian markets, investor sentiment has been encouraged by certain policy measures like expanding PLI (production linked incentive) schemes. This is followed by tax relief for developers of real estate, as well as buyers of homes. For fertilizers, a subsidy of 65,000 crores has been introduced. As a consequence, the domestic economy is experiencing a push that will see it through in the future.

Commodity Stocks Gathering Steam

Economic activity is on the rise and expected to see only further gains. Analysts see an increase in trading activity in these markets, as the demand for industrial commodities has picked up substantially.

It is noteworthy that the stocks of copper and crude oil are expected to bounce back. Possibly to numbers higher than they were before, with demand for these surging. OPEC may be compelled to pinch the supply just so that it is enough to maintain steady prices of crude oil.

On the road ahead, copper and crude oil are touted to have a great performance. With regard to the rollout of the COVID vaccine, trading is seeing a significant upward trend. For the next year, traders and analysts are confident that these markets will only see a positive path. The price of copper may go up to the 640 INR level, predict experts. Crude oil isn’t far behind and according to WTI, may reach $50, with Brent oil reaching a level of $55.

The Power of Bullion

 

Right now, though gold prices are at a low, compared to the peak prices they had reached in 2019, an increase is expected by trading experts. As stocks in other sectors are seeing a consistent rise, they may explode to miraculous numbers amid the success of the COVID-19 vaccine. Gold seems to have lost its shine as a safety-haven. This comes as a result of people currently spending on investing in real estate and stocks. The metal is gaining, though slowly, and hard-core investors still view the metal as a hedge against inflation and currency fluctuations.